Does SAP’s Hasso Plattner Have a Real PhD?

Executive Summary

  • Hasso Plattner is frequently introduced as Dr. Hasso Plattner.
  • Is Hasso Plattner’s degree anything but honorary?


In a previous article, I questioned whether Hasso Plattner behaved as a Ph.D. The reason being that he is so often divorced from reality. He also does not communicate in a style that is consistent with other Ph.D.’s I know, and I proposed that people who have Ph.D.’s who don’t care what is true, should be required to give those Ph.D.’s back. Since that time someone reached out to me to explain that he did not think Hasso had a real Ph.D.

Searching for Hasso’s P.h.D.

Since I began working in SAP, it had always been generally accepted that Hasso Plattner was  Ph.D. In reference after reference, Hasso is repeatedly referred to as “Dr. Hasso Plattner.” In fact, I was once told to add “Dr.” to Hasso Plattner’s name because if Hasso Plattner had attained a Ph.D., then it was required that I add that to every possible reference. That is not true, but this demonstrates the degree to which the idea that Hasso must have a Ph.D.

However, when I went go and look for Hasso’s Ph.D. I could find no mention of it outside of this quote from Wikipedia.

“Since his retirement from SAP, Plattner has been particularly active as a benefactor in the field of technological research. Media reports have named him one of Germany’s most important private sponsors of scientific research. Plattner received his honorary doctorate in 2002 and his honorary professorship in 2004 from the University of Potsdam. Plattner had also received an honorary doctorate (1990) and an honorary professorship in Information Systems (1994) from the Saarland University, Saarbrücken. The same university named him an honorary senator in 1998.[12]”

So Hasso appears to have two honorary doctorates. Outside of these two honorary doctorates, Hasso does not appear in any other source to have his P.h.D listed. This is odd. I read many books and research papers from authors that have P.h.Ds and with each of these authors, it is a straightforward matter to find their P.h.Ds. That is the schools they attended, when they attended them and what the subject for which they attained their P.h.D. Yet, with Hasso, I can’t find this.

How Honorary P.h.D’s Work and Who Gets Them

Now lets us discuss the honorary P.h.D for a moment. Honorary P.h.Ds are given out like candy often for providing a commencement speech. The work involved in getting one is nothing, and they are usually given out to high-profile individuals. There is also an ethic involved with honorary P.h.Ds. That is, you are not supposed to pretend it is a real P.h.D. They are basically a joke P.h.D. Again, honorary P.h.D given for a commencement ceremony speech, real P.h.D can take 4 years to attain and only about 1 out of 140 people (in the US at least) to attain an undergraduate degree ever attain a P.h.D.

Moreover, this story gets better. This is because Hasso did not stop at pretending to have a P.h.D. He also decided to start an institute at the university close to his personal residence, the University of Potsdam.

However, how can a person who has never completed a P.h.D program start up a pseudo-mini-university? Its all a bit ridiculous. This is explained in the following quotation from Wikipedia.

“Also in 1998, Plattner founded the Hasso Plattner Institute[3] for software systems engineering based at the University of Potsdam, and in Palo Alto, California, its sole source of funding being the non-profit Hasso Plattner Foundation for Software Systems Engineering. Plattner has pledged €50 million of his personal fortune over a period of 20 years. Since its foundation, Plattner’s commitment to the HPI has quadrupled to over €200 million. He not only fully finances the HPI, but is also actively involved as a director and lecturer in Enterprise Platforms and Integration Concepts.[13]”

Again, the University of Potsdam also conferred upon him one of his honorary degrees. Obviously, the University of Potsdam benefits from having the Hasso Plattner Institute on their campus. Was this one of the motivating factors in conferring an honorary P.h.D. to Hasso Plattner?

A Fictitious Backstory from a Fictitious P.h.D?

The Hasso Plattner Institute is the location of yet another made up story by both Hasso and SAP where they created a deliberately false backstory to make it appear that Hasso and his P.h.D. candidates created a “whole new database,” which I previously covered in Did Hasso Plattner and His Ph.D. Students Invent HANA?

One of the major problems with HANA has been that it was designed in great part by Hasso Plattner, who was never qualified to design a database. This constant overestimation of knowledge is consistent with faking academic credentials.

Later he donated money to Stanford and they created the Hasso Plattner Institute of Design. SAP has used this to promote Fiori, repeatedly leveraging the Stanford name. Yet after the institute being created, and all the discussion around Design Thinking (which I covered in the article Does Design Thinking Improve SAP’s Implementation Speed?), the output of Fiori is underwhelming.

Falsified Academic Authority

Hasso, and SAP used his honorary degrees to communicate false authority for over a decade and a half. Neither Hasso nor SAP ever let on that Hasso’s degrees were honorary. I have been reading and analyzing Hasso Plattner’s writing and quotations for years, and find that he constantly lies and constantly pivots between topics which demonstrates an unstructured mind. This is the last person who would make a good P.h.D candidate. My analysis of Hasso Plattner’s writings is that he works backward from what he wants to be true, and makes up a story to fit the conclusion. That is sales, not academic thinking. I know whenever I read his material or watch his presentations that I can’t trust that any of it is true.

Ding Ding Ding

We award Hasso Plattner the Golden Pinocchio Award for claiming to have a real P.h.D when in fact he only holds honorary P.h.D.s. 


This honorary P.h.D issue is another case of both Hasso and SAP using deception to trick customers into thinking that there is some great mind behind SAP. And the trick worked. It worked on me. I never thought to actually look up Hasso Plattner’s educational credentials. Naively, I never thought that someone, particularly someone so well known would falsify his or her P.h.D by converting an honorary P.h.D to a real P.h.D.

If anyone can find Hasso Plattner’s academic doctoral credentials, send them to me the link to review. But as I said, it is very odd that they would not be easily found.

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The Art if the SAP Support Flip Flop

What This Article Covers

  • Outlining the Strategy For Moving Customers Along the Desired Pathway
  • SAP HCM Support Flip Flop
  • Illumination of A Major Technique Used to SAP to Control Customers
  • How SAP is Able to Frame its Flip Flops as Being “Customer Centric”


In this article, we will expose one of the primary ways that SAP pushes its customers to move to new products.

Outlining the Strategy For Moving Customers Along the Desired Pathway

It has two parts.

  1. The first part is the deadline, and..
  2. the second is the flip-flop on that deadline.

Notice the following case study on the flip flop on support for the SAP HCM application

SAP HCM Support Flip Flop

“First the announcement under the unassuming title of: Product Note: SAP HCM On-Premise Option for SAP S/4HANA. Basically, this boils down to a choice for customers. Remain on premises for HCM provided they switch over to S/4HANA and, in doing so, get extended support through 2030 or go the SuccessFactors cloud route. Support for other HCM ERP versions ends in 2025.” – Diginomica

SAP made the following statement.

“SAP also continues to support our customers using SAP ERP HCM, our on-premise HCM solution. While an increasing number of them are migrating to SAP SuccessFactors solutions to accelerate their digital HR journeys, we also recognize that every customer journey is unique and must be undertaken at each customer’s own pace. For some SAP customers this includes a desire to deploy their HCM solution in an on-premise environment for the foreseeable future.”

The reason for all of this?

“The bottom line is SAP has really struggled to convince their ~12,500 SAP HCM customers to move to #SuccessFactors as the last provided info had ~600 out of the 2,000 SuccessFactors Employee Central customers coming from SAP HCM. Many of these customers understandably want some assurances that SAP will continue to support SAP HCM further out than 2025 which could have easily been provided by getting agreement to move the entire Business Suite out to 2030. Instead, SAP has decided to introduce a new licensed offering called SAP HCM On-Premise for SAP S/4 HANA that will be built by 2023 and will be based on SAP HCM so they are counting on customers trusting SAP will deliver something five years from now, being willing to do an upgrade (always painful in SAP), signing up for a new license and all of this to get virtually the exact same functionality they have today and an extension of support until 2030.”

Therefore, very practically speaking, SAP HCM customers are not migrating to SuccessFactors. Let us do the math. So 600/12,500 is roughly 5%. Five percent of SAP HCM moved to Employee Central. This is nearly six years after the acquisition (SuccessFactors was acquired in Feb of 2012).

Therefore, the migration of HCM customers to SuccessFactors can rightly be called a failure. This brings up another question which is was the outcome of the SuccessFactors primarily PR related and to make an impression on Wall Street by having Bill McDermott repeatedly say “SuccessFactors” for six years.

But getting back to the support implication. SAP had to extend support for SAP HCM as nowhere near enough customers were moving.

This is a pattern of SAP.

Illumination of A Major Technique Used to SAP to Control Customers

This is a staple of SAP at this point. In the comments to the press, everything is about SuccessFactors and how everyone will migrate to SuccessFactors. But then, the reality of projects is that many customers will not migrate to SuccessFactors from SAP HCM. How many customers have been migrated to SuccessFactors versus SuccessFactors just keeping the customers it already had before the acquisition? The same question could be asked of the Ariba acquisition.

At some point, reality intervenes. And changes are made more in the background, with SAP hoping that no one notices.

This is why it does not make sense to listen to what SAP says. SAP views its customer base as rats to be pushed down a maze. Many if not most of SAP’s statements are to facilitate this progress through that maze. Instead, it makes more sense to evaluate likely outcomes without worrying about what SAP says. If SAP has a large number of customers on HCM, then yes support will be extended.

SAP is brilliant at this.

  1. First, they set some unattainable timeline…
  2. Then they change direction 180 degrees, but they frame it as if they “listened to customers.”

They somehow turn a flip-flop on a policy that was just a “rat through maze” statement as being customer focused. 


SAP’s marketing department is the New England Patriots of enterprise software. Other vendors run around scratching their head wondering how they got away with it.

SAP’s statements about when support should be taken with a grain of salt. Ultimately it is how many customers have moved away from the previously supported item that will determine when support expires. SAP has a 90%+ margin in its support business. SAP has plenty of resources to support applications for many years, but it chooses to limit support as a mechanism, (or in many cases pretending to limit support) to coerce customers into moving to new products.

  • The best way to understand SAP is that they will never be happy with their customers just staying where they are. They must motivate them to continually spend more money on SAP upgrades, consulting through partners, etc..
  • One way of keeping away from these types of threats and manipulation by SAP is to move to third-party support.

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This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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How Accurate Was Bluefin Solutions on C/4HANA?

Executive Summary

  • Bluefin Solutions published a bizarre article on C/4HANA that focused more on methodology than on what C/4HANA actually is.
  • The proposal by Bluefin Solutions is that C/4HANA will speed implementations.


Bluefin Solutions has been the source of an enormous amount of information around HANA and S/4HANA. But visiting Bluefin Solutions website, one can find false information on any SAP topic. The reason is that none of the information is designed to be accurate, it is designed to drive revenue and to be consistent with whatever SAP says. In this article, we cover the false and compliant information provided on C/4HANA.

Global Head of SAP C/4HANA?

Bluefin Solutions has a history of giving exalted titles to individuals. This was the case when John Appleby was the “Global Head of HANA” before being promoted out of that role. This has occurred again as the author of this article, Theirry Crifasi being called the “Global Head of C/4HANA,” and having this title featured prominently at the top of the article. This is misleading because SAP has very little business from C/4HANA, and it is unlikely that Theirry Crifasi has many projects he is managing. C/4HANA was just announced at SAPPHIRE at the beginning of June….is there really enough work to justify a “Global Head” for each consulting company? In a previous Bluefin Solutions article we analyzed we found that they also have a “Global Head of Leonardo.” A solution that almost no one uses but apparently is what allows frozen ice cream to be delivered (as covered in the article Is it SAP Leonardo that Ensures Frozen Ice Cream Delivery?).

Hence my new title at Brightwork Research & Analysis will now be “Global Head of Unicorns.” I have put myself in charge of all the unicorns, and….

It is very rare to give out a Golden Pinocchio Award before even getting into the analysis of the article, but Bluefin Solutions did it. They win the award for a deceptive title of the author. 

This is already shaping up to be an envigorating accuracy analysis. Now let us get to the article.

SAP is Communicating that C/4HANA is in the Public Cloud?

Theirry Crifasi begins the article by asserting that I was unaware was a major thrust of C/4HANA.

“The 4 main pillars of the portfolio (sales, service, commerce and marketing) have been renamed and closely follow its main competitors, namely Salesforce and Oracle: for example, SAP Sales Cloud vs Salesforce/Oracle Sales Cloud. This should make it easier for customers to understand what capability they cover as well as to reinforce the fact the whole suite is in the Public Cloud.”

How does this action follow its main competitors? First, the main competitor of CRM is Salesforce, not Oracle. Oracle has very little CRM business, and most of it is due to Oracle customers for other items buying what Oracle has to offer. Secondly, Hybris, the main component in C/4HANA is focused more on e-commerce while Salesforce’s primary focus is CRM. So this first contention makes no sense, and the second contention, which is based on the first contention is also illogical in that naming a suite, which has no correspondence to any name used by SAP or Oracle, also makes no sense. This entire paragraph reads like a James Joyce novel. But this either could be merely a highly illogical paragraph or a smokescreen, that is deliberately obscuring in nature.

SAP/Bluefin Solutions Combine to Misinform Customers about C/4HANA’s Integration?

Like a good parrot, C/4HANA is careful to, just as SAP, never explain how the component, acquisitions, etc…that are to make up C/4HANA are not integrated to one another. It normally takes years for SAP to work out the integration for their acquired applications, but you won’t find that information from the C/4HANA article.

This is a slide from SAP. Something unmentioned by either SAP or Bluefin Solutions is that none of these applications are integrated at this time, and won’t be for years most likely. 

SAP’s Success and Credibility in CRM?

“Customer experience and customer relationship management (CRM) technologies are a growth market and SAP is looking for a growth engine for its Cloud business. In fact, CRM software by license revenue is already this year’s largest category in the enterprise application market. 

Last time SAP ran a major CRM campaign was 3 or 4 years ago with the ‘Beyond CRM’ campaign. Combined with the C/4HANA rebranding this campaign will generate renewed focus and attract attention from customers looking at digital transformation programmes.”

SAP has been looking for growth in CRM for some time, but they have been unsuccessful because their CRM offering has been so poor. But does Bluefin Solutions point this out to the reader? No. It is critical, SAP would not like is, so Bluefin Solutions chooses to deceive rather than enlighten the reader. And it is worse than even that. SAP made very aggressive statements and falsified its CRM customer numbers in their CRM business in the past.

CRM is a very large market, but that does not follow that SAP will be able to capture very much of it, especially since all of the applications that make up C/4HANA aren’t actually core CRM.

It is true that SAP has not run a significant CRM campaign in years, but the question that should be asked is why. The answer is that SAP has not had anything to talk about in the space since the failure of SAP CRM.

This entire section is the author communicating that they are going to mislead the reader as to SAP’s history with CRM. If this is what Bluefin Solutions publishes on a topic, imagine what they say to prospects and clients one-on-one?

S/4HANA and HANA are Growth Engines for SAP?

“The HANA platform and S/4HANA have been growth engines for SAP over the last few years but improving customer experience is now firmly on the top of the boardroom agenda.”

S/4HANA has not been a growth engine as it has had few implementations. What are 8900 purchases have resulted in only 1500 attempted implementations.

HANA has been a better story, but HANA is no longer growing, and companies that have HANA, unless they only use HANA to support BW, are generally not having good experiences with HANA. Furthermore many HANA purchases have been based upon either exaggerated claims, or have been purchased to satisfy indirect access claims. This is the nature of the part of the Teradata lawsuit against SAP.

Hmm……could there be a reason that Bluefin Solutions is not bringing up these topics? Let us see, I wonder if it is a good idea to get information about SAP from consulting companies that are trying to sell SAP consulting services to implement SAP?

C/4HANA is Integrated to S/4HANA?

“The ease of integration of C/4HANA products with S/4HANA will enable these organisations to provide their customers with a holistic customer experience from front-end to backend not just limited to a nice website or a clever chatbot.”

This is standard practice on the part of SAP and their consulting partners. As soon as the acquisition or announcement is made, the proposal is that the application is already integrated. First, C/4HANA is not integrated to S/4HANA. Secondly, the C/4HANA suite is not integrated to the components that make up C/4HANA!

Once again, Bluefin Solutions is leaving out important details regarding C/4HANA.

C/4HANA Positioning

“Over the last 2 years, SAP has been assembling a portfolio of solutions either through acquisitions or its own development: Abakus, Gigya, CallidusCloud,, Coresystems and Hybris Revenue. The rebranding and repackaging as described above must be restructured to align to the C/4HANA vision.

The most recent trend around “trusted data” which enables the ability to offer personalised offers is a strong angle SAP is pushing through its Gigya acquisition now called Customer Data Cloud. Recent consumer backlashes like the Facebook Cambridge Analytica data scandal have shown organisations cannot be “creepy” anymore with their customers and collect any data they want without customer consent. Customer relationships should be based on trust and shared with customers instead of being managed via an inside-out approach.”

  • The assumption is that this portfolio of solutions makes sense. It is difficult to see how that is, and it is difficult to find the CRM solution from the acquisition.
  • The article presumes that all of these applications will be integrated, but is this author familiar with the history of SAP acquisitions?

For example, when Business Objects was acquired, it was proposed that Business Objects would be highly integrated, and that never came true. Ariba took many years to be integrated. Secondly, unlike the statement above not only has integration never been a strength of SAP it has been a well-known weakness as making the most demanding applications in which to integrate.

Integration Has Always Been an SAP Strength?

“Integration has always been SAP’s strength. C/4HANA will obviously continue to offer ease of integration to customers with SAP backends like ECC or S/4HANA. The integration of the recently acquired CallidusCloud and Coresystems products into C/4HANA will also strengthen the horizontal integration within the sales and service offerings as well as enlarge the functional coverage for these scenarios, thus allowing SAP to better compete with the likes of Salesforce.”

It is true that SAP ECC was integrated between its modules, but outside of ECC the integration story quickly degrades. Even internally developed applications like SAP APO have had a problematic integration history connecting to ECC with the CIF. For the acquired products the integration history is far worse. Its integration XI/PI/PO integration product is one of the weaker offerings as was covered in How Non-Programming Integration Solutions from SAP Damage Projects.

The statement that C/4HANA will…

“obviously continue to offer ease of integration to customers with backends like ECC or S/4HANA”

..implies that C/4HANA is integrated currently.

Hybris has some degree of integration to ECC, but it does not have that integration to S/4HANA. Secondly, so many of the applications that make up the C/4HANA suite (like CalladiusCloud) for example are very recent acquisitions. That means they have no integration currently. This overall paragraph by Crifasi is deliberately deceptive. Crifasi is taking advantage of the reader’s lack of knowledge to promote a false understanding of what a customer of C/4HANA could expect regarding integration and when they could expect it.

Why is (All of a Sudden) Roadmap Necessary?

“SAP has already shared with its partners a detailed 3-year development roadmap for the C/4HANA portfolio. There are still quite a few clarifications needed before partners can confidently advise their customers on their own roadmap. Personally, and maybe because I have been a solution architect for so long, I would like to know more about the key integrations points for all the recently acquired products mentioned earlier, both for master data and the transactional process.

After getting this far in the article, having proposed that most of the integration issues are worked out, it is odd to find Crifasi switching course and saying he needs to know more about the key integration points. This seems to be where he tells the audience that he is “not just a parrot for SAP.” The fact is, C/4HANA is not a product and will not be for quite some time. There are plenty of CRM applications to choose from that a quite inexpensive. I use one that costs $10 per month and works great. But Cristasi and Bluefin Solutions would like you to consider a solution that has a roadmap as to when it can be used as an integrated suite, seems to lack a CRM system, is from a vendor that has no history of producing a competitive CRM application and will have most likely the highest TCO in the CRM space when all is said and done. Clearly, people should be scrambling to bring in Bluefin Solutions as quickly as possible!

Leaving Out SAP’s History?

Something else predictable is that no consulting partner of SAP will ever publish anything in SAP’s history that is remotely unflattering. However, SAP has a  long history of problems with CRM. This is explained in the following quote from the book SAP Nation 2.0.

“At SAPPHIRE NOW, in May 2015, SAP Digital announced a new set of products including a CRM solution at $29 per user per month. SAP Claims to now have 17 million Jam users and 2,000 HANA start ups. The executives responsible for such SAP initiatives proudly brag about them, even though they contribute merely 1 to 2 percent of SAP revenues and they keep adding to the sprawl.”

This was certainly known by Bluefin Solutions, but it was not included in the article. In fact according to Bluefin Solutions, SAP’s history of futility in CRM is to be entirely hidden from readers.


This article is written by an author with little interest in communicating anything that is true to the reader. If this consultant’s article were an indication of the advice that one can expect from Bluefin Solutions, one could expect Bluefin Solutions to take advantage of any lack of knowledge on the part of the customer to create the impression that C/4HANA is far further along than it actually is. As with other articles written by Bluefin Solutions, seeds of distrust are sown merely through reading the article.

This article receives a Brightwork Research & Analysis score of 2 out of 10 for accuracy.

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Analysis of SAP’s 2017 White Paper on Indirect Access

Executive Summary

  • SAP’s produced a highly misleading 2017 white paper on indirect access.
  • In the white paper, SAP introduced a new policy for SAP ECC customers and S/4HANA.
  • We analyze SAP’s proposal regarding indirect static read scenario as well as Order-to-Cash (O2C) and Procure-to-Pay (P2P).


In this article, we will analyze SAP’s white paper on indirect access to measure its accuracy, as well as what the paper says about how SAP will enforce indirect access going forward.

SAP’s Executive Summary

“This white paper is intended to communicate the Indirect Access on-premise pricing policy changes made in Q2017, as well as outline the future direction with respect to the licensing of Indirect Access.

The technology landscape has changed dramatically over the years and so has the way customers consume and use SAP software. Unlike the past when most use of SAP ERP involved employees of our customers logging into the SAP ERP system directly, there are now a multitude of scenarios related to ERP usage as shown in Figure 1.”

  • Populations using SAP ERP: In addition to employees, there are business partners, consumers, devices, automated systems, bots, etc. that now use SAP ERP.
  • Access to SAP ERP: Direct access by users logging into the system, as well as access via other SAP and 3rd-party applications, platforms, multiple layers, etc.

“While SAP maintains its position that any use of SAP Software needs to be properly licensed, we are embarking on a journey to modernize our licensing policy. Policy changes discussed herein are designed to focus on outcomes related to SAP customers’ use of our software based on the value delivered. This outcome-focused approach will eliminate the need to count individual users or other parties indirectly accessing SAP ERP in certain scenarios. This approach will ensure greater pricing transparency, predictability and consistency.”

SAP has a storyline on indirect access they are presenting that puts them in the best possible position to extract unrealistic amounts of money from their customers. But to do this, they must get them to accept certain false assumptions. Part of SAP’s storyline is that for the first time so many other systems are accessing or connecting to SAP.

That is not exactly what is being said, but it is implying many more connections to SAP.

The Truth of SAP’s Connections to Many Applications

The truth is that SAP was always deeply connected to many applications. And at that time, they did not charge indirect access fees.

“In order to modernize SAP’s licensing policies, we started a project in 2016 and have been working with user groups, customers, industry analysts and other stakeholders to understand and address the concerns related to indirect access. We identified the three most common indirect access scenarios: (1) order-to-cash, (2) procure-to-pay, and (3) indirect static read. These common scenarios cover the majority of indirect access scenarios we have observed over the years. The pricing changes for these common scenarios is our first step in the longer journey of modernizing our licensing policy. We will continue this journey by working with the relevant stakeholders in order to comprehensively address all indirect access scenarios”

That was not the intent of “starting” this project. SAP has never been focused on modernizing licensing policies. In fact, SAP is the only vendor I am aware of (please comment if you know of another one) that states in its pricing list that releasing its pricing information would cause it damage. Companies that want to modernize their licensing policies don’t release media material about how they want to do it, they just do it.

What SAP tried to do, which is covered in the article, How to Best Understand SAP’s Faux Change in Indirect Access Policy, is to address customer’s concerns about SAP’s strange implementation of indirect access, which has kept as secretive as it could (in order to be able to use it against customers). SAP’s intent of releasing new information about indirect access, which was done at SAPPHIRE 2017, as to get customers to reduce their defensive posture regarding the topic.

However, as I covered in the article The Danger In Underestimating SAP’s Indirect Access, when SAP was asked about how much it would charge per sales order and purchase order, it replied that it would not publish any information and that everything would be on a case by case basis. Is that “modernizing” it’s licensing policies?

Actually Indirect Access?

Secondly, what SAP is calling indirect access, is not actually indirect access by the definition of any other software vendor.

“We encourage customers to engage with us. We are committed to working with customers who are under-licensed or interested in reconfiguring their licenses per the new policy. SAP assures customers who proactively engage with us in good faith to resolve such under-licensing, that we will not pursue back maintenance payments for SAP Software for such under licensing.”

Customers should not engage with SAP. SAP cannot monitor indirect access with their license transactions, and so they depend on customers to reach out to them and to willingly provide information, which SAP will frequently use against the customer.

This sounds like a “carrot” but in fact, it hides as “stick.”

Background Information on Indirect Access

Use” is defined in SAP’s current contractual documents as: “to activate the processing capabilities of the Software, load, execute, access, employ the Software, or display information resulting from such capabilities.” Additionally, “Use may occur by way of an interface delivered with or as a part of the Software, a Licensee or third-party interface, or another intermediary system.” Use is defined broadly to cover both direct and indirect access scenarios and any use of the SAP Software requires an appropriate license.

Indirect Use / Indirect Access” are a commonly used terms throughout SAP and our ecosystem that describe the same thing. Indirect acess is use which occurs by way of a non-SAP frontend or non-SAP intermediary software. The picture below shows the difference between use via direct access and use via indirect access

This graphic is a keeper! Basically, any system connected to SAP is indirect access. This would include all custom built applications that were at the customer before SAP was implemented. Therefore, SAP should be, under this definition, able to charge for these connections as well. 

How SAP Sets Up the False Construct Around “Use of SAP”

“All use of SAP software requires a license. This includes use which occurs directly (direct access) by way of a user interface delivered with or as a part of the Software or indirectly (indirect access) through a non-SAP front-end or non-SAP intermediary software.”

  • “Direct access to ERP is licensed based on users.
  • Indirect access to ERP historically has also been primarily licensed based on users. However, as mentioned earlier, we have embarked on a journey to move away from user-based licensing to a more transparent and predictable licensing model focused on outcomes related to our customers’ use of the SAP ERP system.”

Really, well that is a change. If SAP had used this graphic back when it was rising as a software vendor, no one would have purchased their software. This is the type of policy that only a monopoly vendor can employ after it is already in the account.

Secondly, indirect access has historically only been what is shown as “scenario 1” above, where an app is developed by the customer to bypass paying a user license — something which has historically been quite uncommon. Two other scenarios described in the above graphic, are only considered to be indirect access by SAP.

New On-Premise Licensing Policy for Common Indirect Use Scenarios

SAP does on to say about Order to Cash Scenarios

Order-to-Cash Scenario

“In an order-to-cash scenario different classes of individuals (e.g., employees of licensee, employees of business partners of the licensee and/or consumers), devices, automated systems, etc. use SAP software to participate in the licensee’s order-to-cash process.”

In the past:

  • “Every employee of the licensee and every employee of a business partner of the licensee who used the SAP software directly or indirectly was required to be licensed as a Named User in order to participate in the licensee’s order-to-cash process
  • Any consumer participating in the licensee’s order-to-cash process was licensed based on the number of sales or service orders placed by the consumers. Note: both “Business Partners” and “Consumers” are terms which are defined in each licensee’s software contracts.”

No, that is incorrect. In the past, say prior to 2012, users that would use say Salesforce, and then sent information to SAP would not have been required to purchase an SAP license if they never logged into SAP. Order to Cash was priced per sales order? I am scratching my head to when that was.

SAP’s price list states that S/4HANA Enterprise Management is charged per user. Cash Management is priced for per revenue unit, but that is the only pricing that is not user based that I could find. My price list may be out of date, but SAP is talking about the past here.

New Policy for SAP ECC Customers

“Instead of requiring the licensing of users, this new policy allows certain indirect order-to-cash scenarios to be licensed via “orders”, as outlined below.

Orders” in an order-to-cash scenario is defined as the number of sales and service orders processed by the system annually; a metric that is more transparent and predictable compared to Named Users.”

Going forward

  • “Any employee of the licensee who uses the SAP ECC software indirectly (through a non-SAP front-end or non-SAP intermediary software) to participate in the licensee’s order-to-cash process will continue to be licensed as a Named User.
  • Any employee of a business partner of the licensee who uses the SAP ECC software indirectly (through a non-SAP front-end or non-SAP intermediary software) to participate in the licensee’s order-to-cash process does NOT need to be licensed as a Named User for such use. Instead, the Use of the software would be licensed based on the number of Orders as defined above.
  • Any Use of the software by consumers participating in the licensee’s order-to-cash process would continue to be licensed based on Orders.
  • Any Use of the software by devices, robots, or automated systems participating in the licensee’s order-to-cash process would also be licensed based on Orders.”

This may be SAP’s policy, but it is entirely inconsistent with the entirety of the history of the software industry.

Are These Assumptions Proposed by SAP True?

Connecting a non-SAP system to SAP is not “using ECC software indirectly.” If that were true, then the non-SAP software vendor would also be due licenses because the customer is using (under that set of assumptions) their software indirectly through SAP!

It’s encouraging to see that SAP will not be charging indirect access fees for SAP to SAP connections. However, this illustrates one of the primary issues with SAP’s application of Type 2 indirect access.

If customers are only charged when non-SAP applications are connected to SAP application, then this creates a barrier to entry to purchasing non-SAP applications. This is a violation of the tying agreement clause in US antitrust law. In fact, this issue is covered in the article, SAP Indirect Access and Violation of US Anti-Trust Law.

Hmmmmm……is SAP Insecure About its Offerings?

This certainly makes it appear as if SAP is extremely insecure about competing on the strength of its offerings, and is seeking to coerce its customers into buying SAP applications and databases. As a policy question, why would the US allow larger vendors to force anti-competitive controls like this on companies?

New Policy for SAP S/4HANA Enterprise Management Customers

  • “Unlike in SAP ECC, any employee of the licensee who uses the SAP S/4HANA Enterprise Management software (S4) indirectly (through a non-SAP front-end or non-SAP intermediary software) to participate in the licensee’s order-to-cash process does NOT need to be licensed as a Named User. Instead, such indirect access by these individuals would be licensed based on Orders.
  • For employees of a business partner of the licensee, consumers, and devices, the new pricing approach is the same as described under SAP ECC.”

Right, that is SAP’s plan. It is unclear why customers should accept this. SAP may be persuaded to change their position if it were explained to them that this policy will lead to outsourcing support to a non-SAP provider.

“Orders are licensed via a traditional perpetual license model, similar to how we license other on premise products today. The pricing is tiered, meaning that the price per order decreases as the volume of orders increases. The pricing is also differentiated for business to business (B2B) vs business to consumer (B2C) scenarios, taking into account different order volumes and values.”

Except, SAP won’t publish the pricing as it will be applied on a “case by case basis.”

Procure-to-Pay Scenario

“In a procure-to-pay scenario, different classes of individuals (e.g., employees of licensee and/or employees of business partners of the licensee), devices, automated systems, etc. use SAP software to participate in the licensee’s procure-to-pay process.”

New Policy for SAP ECC Customers

Instead of requiring the licensing of users, this new policy allows certain indirect procure-to-pay scenarios to be licensed via “Orders”, as outlined below.

Orders” in a procure-to-pay scenario means the number of purchase orders processed by the system annually; a metric that is more transparent and predictable compared to “Named Users.”

Going forward:

Here the same policy that applied for sales orders applies for Order to Cash.

Indirect Static Read Scenario

“Indirect static read is a scenario in which information has been exported from an SAP system (other than SAP Analytics Packages) to a non-SAP system pursuant to a predefined query that meets the following criteria:”

“Was created by an individual licensed to use the SAP system from which the information is being exported runs automatically on a scheduled basis, and”

“the use of such exported information by the non-SAP systems and/or their users does NOT result in any updates to and/or trigger any processing capabilities of the SAP System

SAP’s new policy is that the use of such exported data in 3rd-party non-SAP systems does not need to be licensed, as long as all of the above criteria for indirect static read are met.

Indirect static read scenarios are applicable in the context of data exported out of the SAP ERP system or any non-analytics package from SAP. SAP Analytics packages that are excluded from this policy are: SAP BusinessObjects Enterprise; SAP BusinessObjects Lumira; SAP BusinessObjects Predictive Analytics; SAP Business Warehouse.”

Of the various ideas presented in SAP’s 2017 indirect access announcement, the concept of “static read” is the most deliberately misleading.

Scenario Indirect Static Read?

SAP then provides the list of read access actions that would and would not classify as an indirect “static read.” However, the way SAP listed them is confusing so I have reorganized them below.

Indirect Static Read Actions (Allowed)

  • “An employee of SAP’s customer views reports (e.g. financial statements, forecasts, etc.) in a non-SAP system where such data was transmitted from an SAP system prior to employee accessing the non-SAP system.
  • A licensed employee of SAP’s customer downloads information from SAP ERP to a 3rd party software system so that others can view that information in the 3rd party software
  • Customers of SAP’s customer view a product catalog on a portal built on and operating on the SAP Cloud Platform, where product and pricing info originating from an SAP ERP and/or SAP S/4HANA system was transmitted to the portal prior to the individual accessing the portal.
  • An employee of SAP’s customer views his customer’s master data in a table within 3rd party application where such information originated in SAP ERP and was downloaded to 3rd party application prior to the employee accessing it.
  • An employee of SAP’s customer accesses a 3rd-party data analysis tool to sort, filter and analyze data that was transmitted from an SAP application prior to the employee accessing the 3rd-party tool.”

Basically, what this amounts to is that customers can report on data that was generated in SAP using a non-SAP system.

Not Indirect Static Read Actions (Disallowed)

  • “An individual (not licensed to access SAP ERP) adds information to a predefined query, specifying a particular attribute to be included in such query, which was created by an individual licensed to access SAP ERP, which was set-up to run on an automated, regular basis.
  • Data stored in the SAP system is transferred to a 3rd-party planning and consolidation application prior to an employee viewing and processing the data in the 3rd-party application
  • An employee of SAP’s customer accesses a 3rd-party application to sort data that was transferred from an SAP application prior to the employee accessing the 3rd -party tool and this employee subsequently initiates a transaction within the 3rd -party application which in turn triggers the updating of information in an SAP Application
  • Customers of SAP’s customer or a sales associate of SAP’s customer, accesses a custom portal which is built on and is operating on the SAP Cloud Platform, where information such as product inventory or customer data which originated in an SAP ECC and/or SAP S/4HANA system was transmitted from SAP in direct response to the inquiry from such individual
  • An employee of SAP’s customer accesses a 3rd-party application to view a report which has been downloaded from SAP Business Warehouse
  • An employee of SAP’s customer views his customer’s order status in 3rd party application, where such information originated in SAP ERP and was loaded from SAP in direct response to the customer’s inquiry
  • A sales associate of SAP’s customer checks inventory status of several products in a custom-built inventory system where such information originated in SAP ERP and was downloaded from SAP ERP in direct response to the inquiry.”

What this means is that anything but passively reviewing SAP information is indirect access.

In fact, even adjusting a query is indirect access, which means that companies that use external reporting applications that are not from SAP can very easily run afoul of SAP’s rules and regulations on indirect access.

Frequently Asked Questions

Order-to-Cash (O2C) and Procure-to-Pay (P2P)

“If the customer is properly licensed for these scenarios today, does he / she need to do anything? No, customers properly licensed today do not need to do anything.”

Right, of course. This is actually another propagandistic statement. Being properly licensed means, according to SAP that you agree with SAP’s application of Type 2 indirect access. SAP will beat this horse until it is absolutely dead, and until no one questions the assumption. SAP repeatedly does this in its literature, but its literature on indirect access may how one of the most extreme examples of it.

“Can existing customers purchase more of the same if they have previously licensed Orders to cover consumer scenarios and envision increase in order volumes? There is no change to SAP’s practice of allowing existing customers to license “more of the same”.”

SAP needs to work on writing more clearly because this is the type of sentence you have to guess as to its meaning.

“How is indirect Use addressed when SAP cloud applications are used in conjunction with SAP on premise ERP (ECC or S/4 HANA) systems? Properly licensed individuals using an SAP cloud application (e.g. SAP SuccessFactors, SAP Ariba, etc.) connected to a properly licensed SAP ERP system, can generally access such ERP system to the extent necessary to operationalize the SAP cloud application without any additional ERP licenses.”

Why did SAP feel the need to point this out?

Conflating Cloud with Indirect Access

This is a pattern on the part of SAP to conflate cloud with indirect access. SAP has conflated the two, and ASUG (a surrogate of SAP) has also done this also. The two things have nothing to do with each other. SAP had all kinds of applications connecting to it (or in SAP’s vernacular, engaging in scurrilous indirect access violations) when SAP was first introduced in a major way in the 1980 before anyone had ever heard of SaaS.

“How are indirect access scenarios that utilize EDI for receiving orders licensed? Going forward, such scenarios will be licensed via orders triggered through EDI. However, if a different approach was used in the past, SAP will not require customers to change the approach or re-open this discussion.”

SAP’s wants to be paid for each EDI message now into SAP.

“How are indirect access scenarios that utilize SAP Exchange Infrastructure (XI), SAP Process Integration (PI), or SAP Process Orchestration (PO) licensed? The license for XI, PI, or PO covers the various integration scenarios and not the underlying value provided by ERP. Indirect access of ERP via XI, PI, or PO, if it occurs, still needs to be licensed.”

That would be consistent with everything else SAP has said. This was, by the way, the argument presented by Diageo to defend itself against SAP’s claims. However, this is a highly illogical argument. Whether an SAP integration application is used to connect to SAP is not the issue.

Indirect Static Read

“Must a current contract be amended for a customer to take advantage of Indirect Static Read use rights? SAP intends to apply its Indirect Static Read policy to customers even if the contract does not include Indirect Static Read language.”

Right. But why is that legal? SAP will enforce a term that is not in the contract because static read is not any contracts. But they will enforce it anyway. Sure, that makes sense. Customers should be able to push back on this for rather obvious reasons.

SAP will enforce a term that is not in the contract because static read is not any contracts. But they will enforce it anyway. Sure, that makes sense. Customers should be able to push back on this for rather obvious reasons.

“If a customer has previously licensed Named Users for what is now defined as Indirect Static Read scenario, what are his / her options going forward? If such Named Users are not needed for other scenarios, customers can leverage SAP’s existing extension policies to replace the associated maintenance payments with either (1) a cloud solution purchase or (2) an on-premise solution purchase.”

Horse Trading for Licenses

That is the desired outcome for all indirect access claims made by SAP. SAP will horse trade for licenses. Particularly for licenses that Wall Street wants to see SAP sell including HANA and S/4HANA.

“Above you note that Indirect Static Read scenarios are applicable in the context of data exported out of ERP or any non-analytics package from SAP. Does this imply that anyone viewing data in a 3rd-party application that was exported from an SAP Analytics package requires an SAP license? Indirect Static Read requires appropriate analytics package licenses, if the data is exported out of SAP Analytics package (e.g BOBJ) given the value add of organizing data in an intelligent and easy-to-consume manner, which is provided by such analytics solutions. However, the individuals participating in such scenarios do not need to be additionally licensed to use SAP ERP.”

This paragraph is lunacy.

SAP is confusing customers here because its entire claim regarding Type 2 indirect access has nothing to do with “value add.” But this paragraph does communicate that you can export data using an SAP analytics application (but apparently, not ECC, if the logic follows) and use it in say Excel without being charged. But this brings up the question of SAP’s charge for export from a non-SAP application. This is another very bad sign for customers.

This paragraph is a very bad sign for customers. 


This is yet another in what has become a pattern of deceptive articles about indirect access emanating both from SAP and from ASUG. The white paper is a type of negotiating propaganda put out as something to “educate” customers. It desires the customer to accept a number of false assumptions in order to allow SAP to better leverage indirect access into SAP’s financial advantage.

Software vendors that compete with SAP should be put on high alert by this white paper. SAP is clearly intent on pushing its customers very hard on indirect access and in excluding other vendors as aggressively as they can. Vendors that compete with SAP should begin doing things in a collaborative manner to thwart SAP, as SAP’s type 2 indirect access claims and the Byzantine logic for how they justify indirect access is becoming more and more extreme.

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The Problem with Corevist’s Presentation of SAP and Indirect Access

Executive Summary

  • Corevist which pointed out issues with SAP indirect access. However, as context Corevist creates a mythological idea of a glorious SAP ecosystem. In this parallel universe, SAP is new to monopolist behavior, is new to stifling competition, new to antitrust law violations.
  • What Corevist does not mention is that Corevist is restricted due to its partnership agreement as to what it can say.

*This is an in-process research design document. It will be updated as the design is refined.


For over, a year Brightwork has been offering some of the most in-depth coverage into SAP’s application of indirect access. Recently, Corevist, a software provider of cloud-based B2B has begun to become prominent in its criticisms of SAP’s application of indirect access.

Corevist’s SAP Quotes

“I love SAP. Always have, always will.

I love how SAP simplifies business, especially for midmarket firms. Where would we be without it?”

Well, IT would have a much more open environment. They would not have firms like Accenture and Deloitte ripping off customers globally using SAP as a way to do it. Other software vendors would flourish. Overall it would be a fantastic development.

What Sam is doing is presenting is the myth of the golden age of SAP.

We cover the myth of this golden age in the article The Myth of SAP’s Golden Age.

We find it to be a strange thing to pledge such loyalty to something that is not the primary thing you have focused on in your career.

The Myth of the Glorious SAP Community

“I love the SAP community, and I love the people who make the B2B market tick.”

And what is the SAP community?

Do we speak of the Oracle community or the SAS community? A little perhaps but nowhere near as much as we discuss the SAP community, often described as the SAP ecosystem by Vinnie Mirchandani in his book SAP Nation.

SAP’s ecosystem is enormous and enormously powerful. I describe it like this in the intro to Brightwork’s S/4HANA Implementation Study.

“SAP leadership perceptions are the result of a global orchestrated powerful ecosystem all with vested interests. System integrators, CIOs/CFOs, analysts and IT media defend the perception of SAP leadership to preserve their interests, which have been valued in trillions of dollars. (See the book SAP Nation and SAP Nation 2.0 by Vinnie Mirchandani for a fuller explanation of the financial implications of SAP’s ecosystem.) According to Gartner, Accenture has 46,000 SAP consultants, IBM has 36,000, can you count on their neutrality to give you advice on SAP? They clone what SAP says with no research or verification, what SAP says they repeat. This leads to zero objectivity and what should, logically at least, amount to zero credibility as to the viability of S/4HANA.”

A Coalition of the Billing

Its a coalition of companies built around making the most money as possible from a company that has a monopolistic power of its consumers. Accenture and Deloitte recommend SAP for the only reason that they can make the most money recommending SAP. Software vendors subordinate themselves to SAP’s partnership agreement, which controls the media output of these companies concerning SAP.

What no one seems to ask is why do other software vendors need to be “partners” with SAP? Systems are supposed to be freely connectible with other systems. But SAP does not work like that. To get into SAP accounts, other vendors often need to be “certified solutions.” This gives SAP enormous power over these vendors. In fact, before we get to the topic of indirect access, if anti-trust law were still enforced there would be many questions about SAP’s partnership program. That is, does SAP abuse its power over SAP software vendor partners? And why was this arrangement created in the first place?

Media entities write SAP friendly articles in return for cash. This is the community that Corevist defend.

But now Corevist has a complaint about this wonderous SAP community, and that is indirect access.

A Love of Intellectual Property Law?

Sam Bayer explains it like this.

“I love intellectual property laws. They protect the spirit of innovation that built our economy–the same spirit that undergirds the entire tech industry.”

Well not entirely. This is the cover story for intellectual property laws, but the reality is a far murkier affair.

Intellectual property laws in the US are used by pharmaceutical companies to extend patents on drugs when they expire. Indirect access is a perfect example of a ludicrous exaggeration of intellectual property laws. SAP defines violating its IP as any company that connects to their system. So it would seem strange that Sam would take this time to laud intellectual property laws.

Furthermore, there is a large contingent of law that questions the validity of software patents. There has been the rise of unethical legal specialist firms called patent trolls. They run around looking for low hanging fruit, that is companies they can bring suits against and shake them down for settlements. The cost of defending even a spurious patent lawsuit runs between $1.5 and $3 million. This causes most defendants to settle.

Patent Trolls as Wide Eyed “Entrepreneurs”

Most patent troll lawsuits in the US are brought in a single district in Tyler, Texas. This is done even though neither the plaintiff nor defendant have offices there. The cases are brought there because years ago Texas Instruments found success bringing cases in a district with a small criminal backlog. Now patent troll lawsuits are big business for Tyler, TX.

Long story short, all is not well with software intellectual property rights. One cannot declare universal love for software intellectual property rights without qualifying what parts. Furthermore, SAP has much more IP protection than other software vendors because they have so much more money for IP attorneys.

Is SAP New to Monopolistic Behavior?

“But I don’t like illegal monopolies.”

Sam makes it sound like this is something new.

SAP takes intellectual property from smaller vendors; they had a specific program for this called xApps that was partially designed to pull IP out of smaller vendors which you can read about in our article Its Time of the xApp Program to Die. Teradata, a longtime partner of SAP, filed a lawsuit against SAP alleging (among many others things) IP theft, as well as using monopoly power in the ERP market to coerce customers to purchase HANA instead of Teradata’s products.

138. Teradata has been harmed and will continue to suffer irreparable harm as a consequence of SAP’s conduct. Teradata is entitled to an injunction on restraining SAP from engaging in the unlawful tying of upgrades to its ERP Applications with HANA. Unless and until SAP is enjoined, SAP will continue to engage in the unlawful tying set forth above.

149. Moreover, SAP’s conduct has immediate and significant anticompetitive effects.
As set forth above, customers cannot justify paying for EDAW products with substantially overlapping functionality. As the result of this conduct, Teradata and similarly situated vendors will be forced to exit the market.

We were one of the few entities to call for it to end, which that specific program did, but in conversations with some vendors, it is widely known that SAP will reverse engineer the solutions of their partners. This has been told to customers by SAP consultants in meetings, but perversely as a positive.

How SAP Promises to Constantly Copy IP From Othe Vendors

The following quote is a paraphrase of a comment made to roughly ten people in a meeting at one of my clients. It was meant to influence the customer from selecting what was in my view a far better application than what SAP was offering.

“You can go with a best of breed solution, but you have to understand that SAP is constantly surveying the landscape and eventually puts anything that it sees into SAP, so eventually you get the same thing in SAP’s software anyway.”

Now that is a lovable company!

But as SAP does not have a functioning PLM, MDM, warehouse management system and many others, while SAP does this, it is not true that SAP can pull this strategy off.

Software companies, consulting companies, media entities all line up to SAP show their fealty, because at the end of the day all of these companies are about profit maximization, and it is incredibly difficult to find any of them that will stand up to a multinational bully, a company utterly without honor or any ethical center.

Is SAP New to Stifling Competition and Mafia Style Sales Techniques?

“I don’t like illegal bundling of goods and services that stifles competition.

I don’t like the 800lb gorilla pushing people around, isolating them, making them feel powerless.

I don’t like Mafia-style sales techniques that force unnecessary products on customers who are scared to buy an alternative.”

Once again, this is curious to isolate this to indirect access, as it has always been how SAP operated. It just so happens that now it has reached Corevist. That is Corevist loses business because of SAP’s use of the false construct of Type 2 indirect access.

But let us be honest, at what point in SAP’s history did SAP not…

“use mafia style sales techniques to force unnecessary products on customers?”

Sam seems to have little experience with SAP account executives or SAP sales cycles. SAP does this all the time. In fact, in many sales competitions on SAP accounts, the demos and vendor visits are just a pantomime to create the illusion of a software selection. In at least 1/2 the cases the winner has already been decided.

Common Tactics Employed by SAP

Let us review common tactics used by SAP over decades.

  1. Scaring Companies with Integration: Corevist is not aware that SAP has been using the false argument that non-SAP products are incredibly risky because they are so difficult to integrate to SAP to scare companies away from buying non-SAP products? And of course who did whatever they could to make SAP’s products difficult to connect to SAP? The reader can have one guess.
  2. SAP Partner (Biased) Recommendations: Corevist is unaware that SAP consulting partners constantly rundown non-SAP products in a formal conspiracy with SAP? And furthermore that these tactics go back to when SAP first began developing partnerships with consulting companies in the 1980s?

Is SAP New to Stifling Innovation?

“I don’t like illegal activities that stifle innovation within the SAP community.”

SAP ranks as one of the lowest vendors in overall innovation by Brightwork.

This is covered in the article on innovation. After analyzing SAP, we gave them a score of 1 out of 10 in our Honest Vendor Ratings. In fact, SAP is one of the only vendors we have ever analyzed to be negatively innovative.

This is probably a new term for readers. So what is negative innovation?

Negative innovation is when a company takes innovations made elsewhere and make them worse when they implement them in their software. They are the only vendor we are aware of to create a false storyline about their co-founder inventing a new database, which we analyzed and found false in the article Did Hasso and PhDs Invent HANA? 

So if you don’t like companies that stifle innovation, you won’t like SAP. But it is not merely because of indirect access. SAP has always done whatever it could to stifle innovation.

They also perpetually lie about their actual level of innovation.

SAP is New to Antitrust Law Violations?

“I don’t like antitrust law violations, especially when they hurt my friends in the SAP community.

I don’t like SAP’s indirect access policy. Not one bit.”

Well as I stated, the only companies that benefit from SAP are SAP and their consulting partners. Virtually everyone else, including SAP’s customers, lose. But furthermore and specific to Corevist’s claim, SAP has been performing activities that violate the tying agreement clause in anti-trust law for some time. Even before indirect access, SAP would bundle products in a way that gave them an unfair advantage versus competing software vendors.

And what has been the implementation history of these bundled applications?

SAP’s products outside of ERP, which tends to hold companies back, is desultory. The typical non-ERP product from SAP will fail in implementation as is covered in the article How SAP is Now Strip Mining its Customers. 

These products have to lead to one of the largest wastes of IT dollars in the history of IT. In fact, it would be difficult find a close second. And there are hundreds of thousands of people who want to see the monumental waste continue, for no other reason than they can make money off of it. Deloitte, Accenture, Infosys want the status quo to continue, for obvious reasons.

Is the Press Waking Up to Indirect Access?

“I’m glad that the press is finally waking up to the severity of this issue. Please read this article and pass it on.”

The press that Sam Bayer refers to is ComputerWeekly.

If you read the article, we take issue with Sam’s interpretation of the press “waking up.” CW covered indirect access; they did little to illuminate the topic. They can’t. CW’s only real interest is in collecting email addresses and sharing that information with technology companies so they can market to prospects. CW is a honeypot used to attract contacts that it can resell to tech companies. CW sells these names to close to 1000 tech companies who are customers.

Therefore, and for obvious reasons, ComputerWeekly is extremely limited in what it can write about any one of its customers.

We covered ComputerWeekly in this article How Computer Weekly is a Front for Marketing Automation.

This is the IT media that is “waking up.”


Corevist appears intent on presenting indirect access as some recent change of course on the part of SAP. But the evidence that we have gathered through a tremendous amount of research hours is that indirect access is just another form of abuse in a long-established pattern by SAP.

Corevist has a particular strategy planned out for how to raise the issues on indirect access. This seems based upon getting coverage in the standard IT media outlets. But Corevist’s strategy is based upon a foundation that is fundamentally supportive of SAP papering over all of SAP’s previous abuses and restricting the conversation to SAP’s enforcement of indirect access.

The Limits of What Corevist Can Say and Write

When we reviewed the Corevist website what do we find? We already we thought we would find this.

What does that mean regarding Corevist’s press freedom?

Well, it means that Corevist can only push so far on indirect access and that they had better be careful not to attack SAP generally, or be shown to be supportive of any entity or comments that do (like Brightwork for instance) because SAP can pull that certification at any time.

Interestingly, everywhere we look in the SAP community and IT media, we find some type of tie to SAP. Either its media funding or consulting revenue or in this case a valued SAP Certification. In interactions with both Corevist and Dennis Howlett (Howlett’s Diginomica receives funding from SAP), CW (CW is merely a front for marketing automation to roughly 1000 tech companies) we pointed out these connections, and as soon as we traced these connections, we received ad hominem arguments in return.

Ad hominem arguments are a type of logical fallacy and are used as a distracting to circumvent the argument of the defendant. We are told that everyone has some bias, and therefore our evidence is not material. And who tells us this exactly? People with an undeniable financial bias or official tie to SAP.

This brings up the question of whether Corevist can bring the full story of SAP once the topic moves outside of indirect access. Also, it needs to be remembered that Corevist is not a research entity. They sell and implement B2B software. As with most software vendors, information is released to increase revenues. They have no adherence to any particular research standard or ability to make the observations that we make.

Unfortunately, one cannot place indirect access within the proper context without having an accurate picture of SAP long-term behavior.

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Complaint for Copyright Infringement, Trade Secret Misappropriation and Anti Trust Violations, Teradata v SAP.

SAP’s Recycled Indirect Access Damage Control for 2018

Executive Summary

  • SAP has absorbed considerably negative pushback from customers since introducing indirect access.
  • This lead SAP to engage in damage control by providing more deceptive information to customers.


SAP has just released new information regarding indirect access.

In this article, we will not only analyze this information but also analyze the sources that are reporting on this information.

A Review of The Sources

I was first made aware of the official new information about indirect access from Jarret Pazahanick.

In his LinkedIn share, he provided links to the following entities.

  • SAP
  • Dennis Howlett (Diginomica)
  • ASUG
  • Vinnie Mirchandani
  • ComputerWeekly

Before we get to analyzing the content from various sources, let us review each regarding their relationship to SAP.

  • Diginomica: SAP pays Diginomica. How much we don’t know.
  • ASUG: ASUG has no independence from SAP and ASUG is simply another outlet through which SAP releases the same information that can be found on SAP’s website.
  • Vinnie Mirchandani: One of the very few true SAP’ critics and does not appear to take money from SAP.
  • ComputerWeekly: A fake journalistic entity that is simply the web front end for the marketing automation apparatus controlled by TechTarget. Counts SAP as one of the many customers for its marketing automation information. This was covered in this article.

How SAP Creates and Echo Chamber

Our research into SAP has found that the entities that cover SAP are highly biased in favor of SAP. They almost all have financial ties to SAP, and they only very rarely declare these financial connections (Diginomica is the only one in the list above that does).

This allows SAP to create an echo chamber and not to have its statements analyzed critically. SAP has the most advanced media manipulation apparatus that has ever existed in enterprise software. They are not only supported by almost all media entities but are supported by all of the major IT consultancies that have enormous SAP consulting revenues and who parrot whatever SAP says.

And here again, with this announcement on indirect access we have almost all of the sources were either funded by SAP or controlled by SAP (as in the case of ASUG).

Now that we have established the bias of the sources available on this topic let us get into the analysis of the announcement.

The SAP Indirect Access Announcement

As per usual with all SAP press releases, the SAP announcement on indirect access is riddled with falsehoods.

Here are a few examples.

SAP Leading the Industry in Transparent Licenses and Pricing?

“SAP is shaking up the industry and raising the bar on software licensing practices by tackling ERP licensing for the digital age with new licensing practices, new rules of engagement for usage and compliance, and a new pricing model — all developed jointly with our customers, user groups, analysts, and influencers.”

Uuuuum……utterly false.

Along with Oracle, SAP is known for having the most confusing and extractive licensing in enterprise software.

We have the SAP pricing list/spreadsheet, and it is challenging to determine what the price of something should be. SAP account executives cannot price software themselves but must rely on internal pricing specialists. And that is before the discounts are applied, which is an entirely different topic.

SAP not only restricts its price list, but it declares that revealing its pricing is an actionable offense.

This is covered in the following article.

Where is the Published Pricing from SAP?

If SAP is so dedicated to transparency, why isn’t the new change to publish the pricing list on the Internet?

The answer is simple. SAP wants to create the impression of transparency while maintaining its long-held opaque pricing. For readers who like to see an example of pricing transparency…

See the PlanetTogether pricing page.

This is transparent pricing. You can tell exactly what you will pay.

Last we checked PlanetTogether did not even employ any salespeople. True SaaS applications provide pricing transparency, this is yet another reason SAP is not cloud/SaaS. (Note: PlanetTogether does not bring indirect access claims against its customers)

SAP Built on Trusting Relationships with Customers?

“SAP built its business on long-term, trusting relationships with its customers. To address this, we listened to extensive customer feedback and thoroughly reviewed our processes and practices around indirect access. As a result, SAP is introducing new organizational and governance changes to further consistency in our sales and audit practices.”

False. And a backdoor brag to boot.

SAP has this pattern where they combined false information about their history that you are forced to read through to get to the actual meat, which is just disrespectful to the reader. Imagine if I made my readers wade through a bunch of false claims that I had a.) Won a Nobel prize, b.) Finished 2nd in Figure Skating at the Sochi Olympics, c.) Was voted the best dancer in San Diego County.

Also, for a relationship that is supposedly based upon so much trust, we have documented an enormous number of lies told by SAP to their customers over the years, as you can verify for yourself in our A Study into SAP’s Accuracy.

Indirect access itself is one of the most brazen examples of illegally harvesting and misleading a customer based in the history of enterprise software.

SAP Sales Separate is Now from Auditing?

“We are imposing a separation between license sales and license auditing, both from an organizational and from a process-governance perspective to promote objectivity and neutrality. Only the Global License Audit and Compliance (GLAC) organization will initiate, approve or terminate license audits.”

This is going to end up being false, but it is not the primary issue with SAP licensing.

First, let’s look at the reason for this statement.

This is SAP’s attempt to mitigate the perception that there is a complete lack of independence between sales and auditing — which happens to be true (there isn’t any). But, SAP does not use auditing the same way that the worst offender, Oracle does. It has been known for some time that SAP uses indirect access claims when the account manager has determined that they are not getting as much sales out of the account as they think they should.

The bigger issue with SAP is how indirect access is applied…..not auditing. And indirect access is entirely at the discretion of the account executive along with their VP. That is, it is a sales decision whether to bring an indirect access claim against a company. Indirect access has one purpose — to scare SAP customers away from purchasing non-SAP software.

Therefore, ultimately all auditing, indirect access is quite obviously tied to sales targets.

What SAP is Doing With This Announcement?

Ahmed Azmi made the following observation about the announcement.

“This issue isn’t going anywhere because SAP keeps trying to mislead everyone.

“This is NOT indirect access. This is third party access tax. Even in the “new” model, a PO triggered by Salesforce CRM is taxable but the same PO triggered by Callidus isn’t. The tax applies only to third-party product access. An indirect SAP product access is exempt.

This is a tax on third-party software. It has nothing to do with business value. It’s anti-competitive and will only make customers’ SAP estate radio-active.”

Ahmed is 100% correct in this observation. And his labeling of the SAP estate as “radioactive” is a contribution to the framework of interpretation of indirect access.

Ahmed noted that SAP has most the people writing on this topic using their vernacular and definitions. Indirect access is not a non-SAP system calling functionality or data in SAP. That is called application integration.

SAP is using the new applications like IoT and CRM to posit that this creates a new issue of applications accessing their systems, but that is a smokescreen. This is designed to trick people who are not technologists as to the reason for coming up with the falsely repurposed term indirect access. Indirect access has a specific definition, which we covered in this article.

The Definition by SAP?

And it is not the definition that SAP is using. SAP’s definition of indirect access is undifferentiated from application integration.

SAP’s sequence of dealing with indirect access looks like this.

  1. Step 1. Introduce a false construct perverting the definition of the term indirect access to mean as Ahmed observes, a “third party access tax.”
  2. Step 2. Receive blowback from using this anti-competitive tactic in both lawsuits and in pressure sales.
  3. Step 3: Attempt damage control by releasing additional false information, with proposals that the new false information is in the customer’s best interests.

Damage Control 2.0

This is also not SAP’s first attempt at damage control. At the previously SAPPHIRE, SAP introduced a new policy regarding indirect access along with a white paper on indirect access which we analyzed in this article.

Bill McDermott gave a highly deceptive presentation regarding indirect access that was widely applauded by the SAP echo chamber. Bill McDermott cynically stated that SAP needed to be “empathetic towards customers.”

SAP released a new pricing structure for transactions which was hailed as a positive development for customers by SAP’s compliant and paid off media echo chamber.

What these entities never questioned is why any customer should have to pay anything for what is undeniably application integration.

The Framing of the Announcement by Diginomica

One of the articles that covered this announcement was by Diginomica. Some of the coverage in this article seemed even-handed, but there are several problematic statements by Diginomica which have to make one wonder how much SAP’s financial contribution to Digninomica affected its coverage.

Here are some examples.

SAP’s Claims Regarding Indirect Access are True?

“Until around six-seven years ago, IA to SAP systems was a non-topic. SAP claims that IA has always been part of contractual arrangements and therefore customers were on the hook for IA licensing costs.”

SAP claims this, but it is not true.

SAP had indirect access in its contractual arrangements, but SAP deceptively changed the definition of indirect access to mean something else than its agreed-upon meaning.

This is why the often declared advice offered to SAP customers to “check their contracts” is not helpful. The answer is not in the contract. The answer is in the perverted definition of indirect access.

SAP’s Previous Policy Was Pre-Digital Age?

“The problem is that this policy developed during a pre-digital age. It is easy to see how in modern systems landscapes, where we’re talking about machine-driven data input, that the number of ‘users’ could explode. From SAP’s perspective, that didn’t matter. The contract says ‘user’ (with numerous and lengthy definitions), and that was an end of it.”

When was SAP selling software that was in a pre-digital age? SAP never sold a general paper ledger. There was no pre-digital policy that SAP’s license covered. SAP has always been a software company. Software and the data it creates is stored digitally. It is not stored any more digitally in 2018 than it was when SAP became very popular in the 1980s.

This commentary about SAP developing pre-digital age policies is misdirection and deception, pure and simple.

Second, what is machine-driven data input? Is that application integration? Sounds like it.

  • When did SAP not have application integration?
  • Also, why would it cause the number of users to explode?

There is no evidence of greater uncompensated usage due to any new technology change.

When SAP was first purchased, it was integrated with the legacy systems of its customers. Right from the first implementation. (oh yes, and even R/2 was…….say it with me now, “DIGITAL”)

Indirect Access as a Virtual Non Issue

Something which apparently few are interested in bringing up is that true indirect access is only very rarely an issue.

Indirect access is when a UI is used by a company to circumvent the named users on the software. It is so infrequently an issue that almost no one today actually knows its trued definition. In fact, no other vendor but SAP bothers worrying about it. We are quite serious, try to find another vendor that enforces indirect access claims. We are aware of one other who tried to copy SAP, but they were too small, and they failed to enforce not true indirect access but SAP’s perverted definition of indirect access.

We can count our hand the number of times we have heard of this as an issue and all the cases where with companies based in Asia.

SAP Consultants Are in a Quandary Regarding Who’s Interests to Prioritize?

“Consultants and advisors were equally in a quandary because it became difficult to adequately advise customers considering alternatives in areas like CRM, non-strategic sourcing, and HR. This was especially true where customers were considering IoT projects where the number of connected devices that could trigger an SAP transaction was often unknown.”

This is also false.

SAP projects are only implemented by SAP partner consulting firms. I have worked with these companies for the better part of 20 years. I have never run into a single company that ever served as anything but a repeater of whatever SAP said. They have repeatedly shown no concern for their clients and may as well be the consulting arm of SAP. Most of them compete with how much they can show their subservience to SAP. Secondly, their subordination to SAP on messaging is spelled out in the partnership agreement.

Therefore the idea that consultants and advisors are in a “quandary” is just false. They take the side of SAP in nearly all cases. In fact, we have several documented examples of SAP partner consulting companies hiding indirect access liabilities from customers. (it would have reduced their potential to make the sale, so better to keep it quiet).

Is SAP Scrambling to Come Up With Solution to Indirect Access?

“In our yearlong conversations with SAP, it is clear that despite the problems, the company was busy scrambling to find a solution that would be fair on all sides, handing this unenviable task to Hala Zeine, with whom I’ve had the most contact.”


Let’s take a step back.

Indirect access is an illegal and false claim of usage on the part of SAP. And Diginomica’s impression after speaking with a major funder of theirs is that SAP is “scrambling to find a solution that would be fair on all sides.” That is SAP is “scrambling” for a solution that is fair — to redress is a policy that is both based upon a bed of lies and is illegal as it violates the tying agreement clause of US anti-trust law? (as we cover in this article)

Is this what we are supposed to believe?

We have a way to redress this issue immediately. SAP could, for example, stop enforcing the illegal sales tactic called faux or Type 2 indirect access.

All of this is a bit like saying that a man who abuses repeatedly abuses his wife is “scrambling” to find a solution to the problem of spousal abuse. The fastest way to do this is to stop punching his wife in the face.

SAP “Believes XYZ” Now Considered Evidence?

“Today, SAP believes it has come up with a fair answer and the noises coming from SUGEN and other user groups are encouraging.”

SAP believes? As in Trump believes that 3 million illegal aliens voted in the US Presidential election?

How would this sentence work in the opposite?

Would for example SAP ever say that “we believe we have come up with a completely unfair answer?”

Probably not right?

SAP Is Often Not Fairly Compensated for Its Value?

“SAP still wants to be paid where it thinks it adds value. Whether that is real or imagined is a whole different story, but it does mean a fundamental shift in the way this topic is priced.”

SAP has $23 billion in yearly revenues. Is getting paid a habitual problem for SAP? If so, it is the first we have heard of it.

In fact, the evidence works in the opposite direction. We have observed and documented numerous cases where SAP and their consulting partners should offer refunds to companies for software that has failed.

This includes software that never should have been released or purchase. Here are some examples:

  • SAP TM
  • SAP BW

This is an abbreviated list, but all of these products are so deeply flawed they either fail or they add extremely little value for the companies that use them. In our Study Into S/4HANA Implementation, we found that SAP had lied to numerous companies about the readiness of S/4HANA, and that those implementations almost all failed.

So, what about the value that was promised by SAP with these applications and other applications that are either complete write-offs or long-term maintenance money pits? We still get requirements for recruiters for skills in SAP applications that have no hope of being taken live.


How the SAP Consulting Market Works

Because they continue to be recommended by Deloitte, Accenture, Infosys, etc.. that could not care less if any application is ever taken live, so they recommend SAP applications where they can bill customers. No matter how many times the big consulting companies fail, they will always be in included in the next round of selection, because customers think they need a big name consulting company. This is an unbreakable feedback loop that removes the major consulting companies from needing to be successful in implementations.

Many of those implementations would have been successful if the non-SAP software had been selected (implementations tend to be more successful when the software is functional).

In fact, it is difficult to find more waste than in the SAP ecosystem. And one does not exist, because there is no other software vendor that enjoys the continued support and protection of the most influential and corrupt consulting companies.

We argue, and can demonstrate that SAP is hugely overpaid for the value it adds to companies.

Therefore, SAP can say whatever it likes, that they believe this or believe that, that they believe the moon is made of green cheese, but Diginomica should not repeat what SAP says without critique.

SAP Account Executives Can No Longer Initiate Audits?

“The much hated ‘surprise’ audit is going away. SAP has explicitly split audit and sales from one another. This means that while routine audits are a part of ongoing contractual obligations, EAs cannot initiate an audit because sales are not part of the audit organization and vice versa.”

And we previously stated, we found this highly unlikely to be true. But Diginomica states this as a fait accompli.

How does Diginomica know if this is true? The ink is not dry on the statement and it is now in the rearview mirror?

SAP Believes Account Executives Act With the Customers’ Best Interests in Mind?

“In closed conversations, SAP has made clear to me that while it believes the vast majority of EAs act with the customers best interests in mind, those who violate SAP’s audit policy will be punished. If that means letting go of an otherwise rock star performer then so be it.”


What a thunderbolt courtesy of Diginomica! That access is really paying off as Diginomica is truly sharing the inside scoop with us mere mortals.

Would SAP admit that the vast majority of it’s EA’s do not act in the customers best interests? If not, then what is the point of this sentence? It is axiomatic and therefore carries no information.

Also, rest assured, no rock star performers will be let go — SAP has repeatedly demonstrated that it does not care about anything but money.

How SAP Will Monitor Their Customers

This following observation is from Voquz, a company that supports SAP customers in license matters.

“Starting November SAP will automatically begin measuring customer’s usage of the nine document types via their USMM tool, which SAP mandates customers run annually for self-declarations. The ability to discover IDA puts SAP in an unprecedented position to force non-compliance discussions as a routine step with all customers. In an official document from last week titled “SAP Global License Audit and Compliance Update”, SAP lays out its framework for future IDA License Fee enforcement. In their latest update, SAP also proclaimed that they separated Sales Teams from Audit Teams to prevent abuse. In reality, the criteria above will trigger audits as routine follow-ups based on your interactions with SAP’s Sales Team. an SAP-initiated License Exchange will override potentially beneficial terms from your old contract which creates additional audit opportunities for SAP, you’ll start paying for IDA when you haven’t in the past, and odds are high you will be rushed into an unsolicited S/4 migration project.” – Sebastian Schoofs

This is a very good analysis by Sebastian and Voquz.

If we look at the vast majority of coverage on this announced new policy, most of the entities in some way drew income from SAP. SAP announces something, something completely antithetical to how they have always operated concerning pricing, which is offering transparency. One analyst compared the new pricing as a “stepping stone to Oracle Cloud and AWS pricing,” even though SAP’s pricing is entirely secret. That is under both the old plan and the new plan.

How can this be similar to AWS or Oracle Cloud if the vast majority of SAP’s revenues still come from on-premises software? But that is the least of the problems with the proposed analogy. AWS (and to a far less degree Oracle Cloud) publishes its pricing. See this link.

See the monthly AWS calculator.

A New Definition of Transparency, Opacity

And what does SAP say about the new prices? According to CIO, which is owned by the ruthless media conglomerate IDG and is paid by SAP and overall SAP toadie.

“With this new model customers have a choice. They can remain as they are today with their existing contracts and pricing, but if they would like to modernize their pricing and move to a more predictable and transparent approach, then they we would recommend this new pricing. We will work with each customer individually.”


“SAP won’t say what bundles will be available, nor how much they will cost: The final price will depend on volume and customer discounts.”

Right. SAP will extract the maximum amount of money from each account based upon how good that account is in negotiating. SAP has always had secret pricing and will continue to do so.

Comparing this pricing to AWS is missing on the topic transparency of published pricing, the invasiveness to the customer, ease of access to pricing information, and on SAP’s pricing history. But if you are within SAP’s orbit or reality distortion zone, this apparently makes some type of sense.

As for being a stepping stone. SAP can publish all of its pricing right now. There need be no intermediate stones to step upon.

All of this brings up the following question.

When Does Secret Pricing = Transparency?

Here is when.

Secret Pricing = Transparency

….when you are paid directly by SAP or when you consult in SAP and place SAP’s interests ahead of your client’s interests.

Indirect Access to Coerce Purchases of Lagging Products

A major aspect of indirect access is driving customers to products that SAP is on the hook to show gains to Wall Street. These are trumped up poor value products that you can’t make any value argument for (S/4HANA is still incomplete and HANA is worse than what it would replace). And forget the customers, let’s focus on what is important.

McDermott and Enslin and Luca Mucic and many others at SAP have large numbers of stock options they must exercise at a high price because checking Outlook, lying and attending meetings must be compensated. But for these special snowflakes to accomplish this task, they must fake it. This is because of their over projections to Wall Street.

See this article which explains the expectations they have created with the financial analysts.

Operation Coercion

SAP can’t get these numbers by selling S/4HANA and HANA to customers even with enormous exaggerations the “old fashioned way” (i.e., without indirect access coercion).

Therefore as observed by this article by Voquz, they need to coerce purchases. And the best way to do so is to pretend that SAP is “moving towards transparency” and make an announcement that amounts to damage control, to recast indirect access in a positive light, and as part of choice and openness.


This release of information is riddled with falsehoods and is primarily being analyzed by entities that are financially tied to SAP. As one would predict, the coverage by the media entities runs the gamut between highly SAP deferential to somewhat SAP deferential. So far Voquz has been the only one that provided a detailed analysis of the policy and what it actually means. There are extremely few entities — such as Brightwork, or such as Vinnie Mirchandani that will outright challenge SAP and call them out for their behavior (and in this case Voquz).

Our prediction is that this new policy will fail. It is very complicated to implement and has a number of booby traps. The types of usage pricing that are implemented by AWS make sense. But this pricing policy, which is entirely secret does not. This policy invites SAP into the customer’s environment to subject them to more monitoring, which is the last thing that any customer would want.

Customers should want to keep SAP as far away from their environment with as little information about the environment as possible. (SAP’s support is of so little value at this point, that this can mean reducing the opening of tickets).

The more SAP knows the more power is handed to them in finding ways to charge the account.

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Definition: toady n.
“servile parasite,” 1826, apparently shortened from toad-eater “fawning flatterer” (1742), originally referring to the assistant of a charlatan, who ate a toad (believed to be poisonous) to enable his master to display his skill in expelling the poison (1620s). The verb is recorded from 1827. Related: Toadied ; toadying.

How Accurate Was SAP on the Sybase Acquisition?

What This Article Covers

  • The Sybase Acquisition
  • Quotations from Dennis Howlett’s Article in ZDNet
  • IT Analysts Always Seem to Love Software Acquisitions
  • SAP Ended up Degrading Sybase Database Market Share
  • Vishal Sikka Continues His Streak
  • Howlett Gets it Right on SAP Penetrating Finance Industry
  • Sybase’s Disappearing Mobility


In 2010 SAP acquired Sybase. This is before HANA had been introduced. SAP was within a year to promote the idea that it had developed a massive innovation in in-memory and columnar database design, which was a pre-existing produce called Sybase IQ.

In this article, we will review the accuracy of the reported statements about the Sybase acquisition.

Quotations from Dennis Howlett’s Article in ZDNet

“John Chen, CEO of Sybase said: “We see potential in the combination of the leader in business applications and the leader in mobile…I firmly believe this transaction is about growth. ” Vishal Sikka said: “This will dramatically increase our presence in mobile…supporting all platforms, Blackberry…Windows…Google…Apple”

“The last couple of years, SAP has talked implicitly about proliferating SAP via devices so at one level this acquisition fits into a strategy that’s been unfolding for a while. However, as Ray Wang notes:

SAP has broken its promise of no more big acquisitions after the BusinessObjects deal.  However, these acquisitions make sense toward the path of next generation applications.”

IT Analysts Always Seem to Love Software Acquisitions

It might have, but the acquisition did not work. Is there some reason that IT analysts don’t ever seem to say that an acquisition is a bad idea? Is this, so they don’t lose access to the larger software vendors?

“During the analyst call, much was made of the in-memory database core that SAP has developed and Sybase column stores as an enhanced baseline requirement for analytics in large-scale environments.”

That is curious.

Hasso Plattner created a storyline where he and his PhDs invented HANA without the influence from much else outside of SAP. This is covered in the article Did Hasso Plattner and His Ph.D. Students Invent HANA?

SAP Ended up Degrading Sybase Database Market Share

“One short-term problem will be a perceived confusion over database selection and the future of the relational database in SAP environments.”

This turned out to be a problem. SAP was not successful in migrating customers to Sybase databases, and Sybase databases have been in decline ever since the acquisition.

Howlett Gets it Right on SAP Penetrating Finance Industry

“Vishal Sikka disputes that, describing the market as both mature but diverse. Sybase has a significant market share in financial services, a market around which SAP sees huge potential despite the recent financial services sector meltdown. But how real is the likelihood of SAP emerging as a key FSI player?”

Vishal Sikka was wrong about this too. SAP never was able to leverage Sybase’s market share in financial services.

“Co-incidentally, earlier in the week, I heard a presentation from Deutsche Bank which showed SAP at the core of the bank’s applications strategy as part of a complete applications overhaul. SAP is only providing back office and even then a pared back version with emphasis elsewhere. It is others that are providing the applications and services that will make an operational and value led difference. Deutsche Bank is a marquee SAP customer in its own back yard. If this is representative of the extent of SAP’s ability to develop profitable relationships in this market then that is anything but a done deal.”

Dennis Howlett was prescient with this prediction.

Sybase’s Disappearing Mobility

“On the mobile side, questions must be raised about what this means for applications – again in the financial and telco utility space. Most applications in these markets are driven by opportunistic marketing campaigns requiring the development of new offers. That in turn often means custom development. Does SAP think that Sybase and in-memory gives them an entree to this massive market? If so how does it plan to manage all the integrations required? Where is the rapid apps development environment that would make SAP a natural choice? It has no real ownership in these markets such that the new combination makes direct sense.”

Here is what we wrote about the Sybase Acquisition back in 2012.

Will Things Change and Improve?

“In a word no.

Although SAP did purchase Sybase, but this does not change SAP’s history or its data architecture for the vast majority of its product database. SAP does not integrate their products with those companies that they acquire. Notice the lack of integration with Business Objects. SAP as a development organization is too self-centered to think that other companies have good solutions and they feel they are the best in every domain. This is called the “SAP Bubble,” and is very similar to the “Microsoft Bubble.” Therefore, most mergers are primarily driven not by development, but by the strategic decision makers in order to co-opt a vendor who is giving them trouble, as was the case with Business Objects. These acquisitions are driven by the desire to capture customers. Over time the main brains in the acquired company leave for other ventures and the captured customers are fed a steady diet of pro SAP marketing. There are questions to whether SAP bought Sybase really for its database or its lucrative customer base in the financial industry. The long and short of this is that SAP does not actually do much to leverage or further develop the technology that it purchases.”

SAP’s History With Their Data Layer

In order to understand why it is very unlikely that very much will change it is important to understand SAP’s history with data and data management in general. Unlike companies such as Teradata or Oracle, SAP, has no history of effective data management within any of their applications.

Examples of serious weaknesses in their data management development include the following:

  • No transactions to easily query the master data of a system (SE16 and SE16N are very limited, and too often lead to the brick wall of a Structure, which cannot be queried. While fields can be looked up in the SAP GUI, in many cases the table that the technical details will show is a structure. This is a virtual table and not a “real table.”
  • Poor data update tools
  • No ERD diagram or publication of all the SAP tables and how they relate to each other
  • No ability to use standard SQL tools to manage or interrogate the database. All data tools are custom front-ends and are universally terrible.
  • Why anyone would think that a company that is done this poorly bad at simple basic data strategies is strange, and why anyone would entrust their reporting solution to them, is even stranger. SAP built its empire based upon application logic, not on the user interface or data management. Essentially SAP just does not fundamentally “get” data, and they have created the very inefficient data backend of any enterprise application.

Sybase’s mobility applications turned out to be a total write off.


The Sybase acquisition did very little for SAP. Once again Vishal Sikka continued his losing streak of being wrong in his statements in this article.

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How to Best Understand the SAP Digital Transformation Navigator

Executive Summary

  • Digital transformation was adopted by software vendors and consulting companies that place the process as the desired outcome.
  • Ding Ding Ding….we have a new Golden Pinocchio Award Winner!

Introduction to the Term Digital Transformation

After many years analyzing various methodologies, tools or assistive items offered by both consulting companies and SAP, it is curious how often the item in question ends up being simply another way for the consulting company or for SAP to get the customer to do what they want. SAP’s Rapid Development Solutions (as we covered in How to Best Understand SAP’s Faux RDS, turned out to be primarily a way to get customers to think they could implement SAP faster than was actually possible. The SAP ASAP Methodology, (which we cover in Did SAP ASAP Methodology Ever Reduce Project Timelines?) was essentially intended to do the same thing.

Neither of these items had any positive effect on projects, and most likely worsened projects by creating unrealistic expectations.

Why Digital Transformation is a Term of Propaganda

It should be noted that the term digital transformation actually is a meaningless term as applied to modern IT projects, which we cover in the article The Problem with Digital Transformation and Modern IT Projects. The reason being is that term digital transformation applies to a change that occurs when something is first converted from non-digital to digital. You can’t apply the term to a movement between two processes that are both digital. So we are beginning this journey with what is a term of propaganda. The definition of which is a term that allows the user to present unsupported assumptions to the listener.

Enter SAP’s Digital Transformation Manager

The following video explains the Digital Transformation Manager.

Interesting actions of note are the following:

Here the “Open Decision” under the category of Supply Chain Management is that what the customer uses is not the recommended solution from SAP. 

Once the previous screen’s Open Decision button is selected one taken to this screen, where the customer is allowed to choose between the Public Cloud and On Premises. If the user selects, then they are taken to the following screen.

Here the customer is using SAP Demand Planning today, but SAP recommends SAP Integrated Business Planning or IBP.


Well, that seems so simple, but that is a huge decision with many cost implications. SAP DP happens to be an application that few companies get very much value out of. Her are some important features that the DT Navigator will not tell you about.

  1. IBP is still not widely implemented.
  2. IBP has maturity issues.
  3. IBP does not have the same functionality set as SAP APO, so one cannot merely say “migrate to IBP.”

Naturally, SAP would like companies to move to their newest software, but SAP DP never met any of the claims for it that SAP set forth. Obviously, another option would be to either replace DP with a non-SAP application or to augment DP with a non-SAP application. Those are real options, which we have covered in great detail in separate articles. However, the more the customer uses the DT Navigator, the less they will be likely to ask those questions. In this way, the DT Navigator can be seen as an anti-decision making tool.

The DT Navigator is designed very simply to get customers to do exactly what SAP wants them to do.

The DT Navigator for Saving Money on SAP Consultants?

Is there a way to actually derive value from the DT Navigator?

We think there might be.

At the conclusion of the video, it is stated that the DT Navigator is designed for both customers and partners. So consulting partners will use the DT Navigator to come up with what they should tell customers to do. As SAP consulting companies don’t do much else when it comes to advise but repeat what SAP says if one views the DT Navigator as simply SAP’s official position on products (that not that the DT Navigator necessarily contains 100% truthful information) then a customer could use the the DT Navigator to cut out the middleman of having to pay an SAP consultant to tell them what they can find from the DT Navigator.

Ding Ding Ding!

SAP’s Digital Transformation Navigator receives our Golden Pinocchio Award for extreme deception. Seriously, you would have to be a twit to take the DT Navigator seriously. 


The SAP Digital Transformation Manager is a sales tool designed to get the customer to do more of what SAP wants. It is presented under the cloak of providing a clear and easy tool, but has as an important built-in assumption that the user accepts the information presented as “recommendations” and that SAP’s only motivation for providing this tool is to “help their customers!”

One should be suspicious of information provided by software vendors or consulting companies that are only introduced to help the customer. 

The pure SAP marketing message is delivered to the Digital Transformation Manager. For example, SAP IBP, is still very lightly installed — and requires purchasing HANA, which comes with a number of negative issues in addition to being the most expensive database among all of the options in the category.

Perhaps not surprisingly, these details are left out of the SAP Digital Transformation Manager.

But the DT Navigator can add value to customers, but primarily to reduce the number of hours that are billed by SAP consultants to simply repeat what SAP tells them.

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This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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How Much Should Hasso Plattner and SAP be Cut Slack for Lying?

Executive Summary

  • Hasso Plattner and SAP tell a large number of lies compared to the typical software vendor.
  • Some have proposed that these lies are not lies but exaggerations.


In this article, we will discuss the interesting double standard that seems to be applied to SAP lies. And the idea that SAP should not be held to a standard to truth-telling.

A Resistance to Criticize Obvious Lies by SAP

In debating various articles that I have written about SAP many people on LinkedIn who are SAP surrogates or general proponents seemingly have not been interested in addressing my questions concerning the accuracy of statements made by Hasso Plattner. The reason for this is, in my view, no matter how false the statement by SAP, SAP resources are fearful of being seen as publicly repudiating it.

The interaction often goes something like the following.

  1. Postponing the Reckoning: The proponent states that I don’t understand the vision of SAP and that in the future the things that the SAP spokesman says will happen and all I have to do is wait. This is one of the common strategies that are not considerate of whether the claim is even possible. I outline this extensively in the article When Articles Exaggerate HANA Benefits and When Articles Exaggerate S/4HANA Benefits. However, my entity, Brightwork Research & Analysis has been virtually the only media entity to describe the impossibility of many of SAP’s claims. Something that is impossible does not require time to determine if it is true. IT media entities normally consider their job done if they simply repeat statements by vendors. After all, they have a source.
  2. How Calling Out SAP on Falsehoods Results in Accusations of Bias: A second approach that is used is for the SAP proponent to question my bias. The evidence of this bias is fact-checking SAP, which is not supposed to be fact checked. SAP is supposed to be agreed with, but never fact-checked. The amusing thing about this is that the entire SAP ecosystem is incredibly financially biased. Large consulting companies recommend SAP because it’s their highest margin item that they can bill the most hours for. The major IT media entities, as well as it analyst, are almost all paid in some shape or form by SAP. The bias that the SAP proponent identifies in this corrupt morass is bias against SAP. When I bring this up to the SAP proponent, they again, are not interested in addressing real bias. Instead, they prefer to use the term bias dishonestly. And when I point out their undeniable financial bias, they tend to leave the conversation.
  3. Silence on SAP’s Exaggerated Statements: When I list the statements by SAP when I list the statements by SAP which often sound ridiculous and false (HANA has 100,000 times the performance of any competing technology, S/4HANA is ready to be implemented, SAP is only based upon best practices), and I asked the SAP proponent to support them or contradict them. Invariably SAP proponent changes the subject.

A Consistent Pattern of Lying

After many years of analyzing sap in one of the few full-time SAP analysts, the amount of inaccurate information that comes out of SAP is it a consistent theme. And these lies are accepted by SAP proponents for obvious reasons. Actually, beyond acceptance, these lies are most often repeated.

Should SAP Be Immune from Charges of Lying

This does bring up the question of whether SAP should be considered immune from charges of lying.

  • That is is SAP in a special category of company.
  • That large company should never be held to what is true because being large means they have natural authority, and that authority should not be questioned.
  • SAP is German. And German companies don’t lie.

That is should we accept that SAP has the right to lie as much as it seems necessary to meet its objectives and should not be criticized.

Are Lies Part of Capitalism?

I bring up this question because in a recent discussion with an SAP proponent I was told that in a capitalist system it should be expected that software vendors will exaggerate.

It has been proposed to me that lying is ok if it is within a capitalist system. It is unclear as to whether lying is considered a part of communism. According to some, we have to accept lying if we want to participate in capitalism. And it implies that lying is acceptable depending upon the economic system that a country chooses. 

How SAP’s Accuracy Level Compares to Other Software Vendors

However, SAP exaggerates far more than other software vendors, and I have the evidence to prove this which anyone can see at A Study into SAP’s Accuracy. This is the most comprehensive listing of SAP’s accuracy documented. When we ask SAP proponents to provide their research into SAP’s accuracy, they disappear.

I know quite a few software vendors that while they certainly present their product in the best possible light do not so consistently lie about their product as SAP, which is why we rate them in the bottom of vendor accuracy in our Honest Vendor Ratings. And of course, all of these software vendors operate within a capitalist system as well. But this research tells a different story of SAP’s lying. It illustrates that SAP’s lying is out of line with the lying of other vendors in scale and scope. This should not be seen a blanket endorsement of other vendors, which is why we created the ratings for a reasonable number of vendors and rated each individually. This research both in the accuracy of other vendors and in a great deal of detail into SAP, allows us to say that SAP lies at a far higher level than the majority of software vendors.

The Problem with Justifying Lying on the Basis of the Economic System

Capitalism just means that the means of production can be kept in private hands. It does not say anything as to whether companies should be lying to meet their financial objectives. There are very few scenarios where lying results in good overall outcomes and the acceptance of lying say quite a bit about the honesty of these person making the determination. And where would this end?

  • Can food companies change the expiry dates on their product in grocery stores?
  • Can pharmaceutical companies lie about the efficacy of their drugs? (oops bad example, as they already do this)
  • Can child care facilities lie about whether children were taken care of after being dropped off, versus being locked in a closet?

Where does the natural extension of the lying argument go?

Overall, SAP proponents seem to be looking for an excuse to cover up for why SAP lies so much. That is they are “cool with it.”

Lying and Market Efficiency

The argument that lying is a part of capitalism is weak and weaker than the proponents of the argument seem to realize. They appear to be forgetting the foundational principle of market efficiency. It is well known that capitalist systems and systems operate better when the market is efficient. However for a market to be to be efficient, it must have access to accurate information. Lying and deception do nothing but reduce the quality of information in the market making the economic system less efficient. Therefore it would seem that any economic system capitalist or otherwise does not benefit from the companies within that system lying to the buyers within that system.

However, faux capitalism is the norm. If we look at large companies, they frequently discuss the free market, and at the first opportunity send in political donations to receive special favors and contracts. Banks pretend they are “rugged individualists” when in fact their entire money creation power comes from the government, and they live almost entirely off of the public nipple.

How SAP Clearly Prefers Executives that Lie

Hasso Plattner is an aggressive liar. It is to the point where when I analyze statements by Hasso Plattner my first assumption is that in some way it contains a lie. His knowledge level is not particularly deep, and there is little to learn from him. What do look for in Hasso quotes is the lie. And I am never disappointed. Some people have ascribed his recent lies to age. However, I know people that knew Hasso 20 years ago, and he has always had a deceptive approach. Hasso tricked many executives in his life, and it has paid off for him handsomely.

Hasso Plattner is by no means unique with an SAP. For people that know SAP the statements made by Bill McDermott average on the comedic.

  • Vishal Sikka told an enormous number of lies about SAP HANA before he left the company some years ago.
  • Rob Enslin appears to be a pathological liar, and I have been amazed by his lies in SAS quarterly analyst calls.
  • I have criticized Steve Lucas for telling enormous lies and for not even understanding the topics of which he writes as I covered in the article Analysis of Steve Lucas’ Article on What Oracle Won’t Tell You About HANA.

I could create a long list of SAP executives that habitually lie, but hopefully, the point is made. I am probably one of the largest consumers of SAP content and of executive statements I cannot think of a single SAP executive who I find to be a reliable source of information on SAP.

This brings up the question of the nature of the executives that SAP promotes and attracts to its company. From the outside, it looks as if the line and lying in extreme forms is a prerequisite for being a top-level executive at SAP. The question that should be asked is why is that acceptable. Why are customers so comfortable with the track record of SAP executives line over such a large period.

Inaccuracies in SAP’s Q2 2017 Earnings Call

Executive Summary

  • SAP made a large number of inaccurate statements to Wal Street analysts in the Q2 2017 earnings call. This included falsified S/4HANA numbers, exaggerating their cloud business, pretending the SAP Digital Boardroom was seeing significant growth, miscommunicating that SAP low cloud growth was what was causing declining margins, Article Quotations, overstatements regarding Leonardo, Bill McDermott altering his previous S/4HANA’s timeline, explaining away the failure of Run Simple, degrading Workday, pretending that a 2.5 to 3-year-old product is still in its “early days” and providing a synopsis specifically designed to mislead people who don’t know anything about SAP.
  • In other words, just a standard SAP earnings call.


On July 20th, 2017, SAP held its Q2 call with analysts. This article is an analysis of some of the information provided by SAP in this call. Much of the information in the call was breathtakingly inaccurate. Understanding why is quite interesting I comment on the quotes below.

Article Quotations

False S/4HANA Numbers

“S/4HANA adoption grew to more than 6300 customers, up over 70% year-over-year. Many other leading companies also went live on S/4 in Q2, including MG [ph] and Bloomberg.”

No that is inaccurate in that very few of those customers are using S/4HANA. This is covered in the article How SAP Controls Perceptions with Customer Numbers.

Exaggeration of the Cloud

“S/4HANA is the number one and fastest growing cloud ERP solution in the market hard stop. We are growing new cloud bookings triple digits and we see an enormous pipeline going forward. Customers are going live with S/4 cloud in as little as six weeks. Deloitte selected S/4 cloud in Q2 among many other signature companies. Centrica, a multinational utility company is using S/4 cloud as the digital core, along with an IoT solution running on SAP Leonardo. This is SAP integration at its finest.”

That is false. S/4HANA has very few customers of any size that are using S/4HANA in the cloud. Furthermore, this will not grow all that much in the future. The reason why is covered in the article Is S/4HANA Actually Designed for the Cloud? 

SAP + Google Cloud?

“We also announced that Sapphire that we have expanded our co-innovation partnership with Google Cloud to deliver integrated cloud solutions for our customers.”

This will not amount to much because Google Cloud is not a big player in the space. Secondly, why is SAP using Google Cloud in the first place? Well, SAP had to drop the pretense that they could compete in the cloud infrastructure space, which is covered in the article How to Best Understand SAP’s Multicloud Announcement.

Digital Boardroom for Growth?

“Overall, new cloud bookings grew 33%, while cloud revenue was up 29% in Q2 and 31% in the first half. Led by SAP digital boardroom our re-invigorated analytics portfolio posted triple digit new cloud bookings growth in Q2.”

It is extremely doubtful that digital boardroom has many sales, so its growth would be larger as the base was so small.

SuccessFactors Employee Central

“SAP SuccessFactors, we saw another big quarter with a new customer additions. SuccessFactors Employee Central now has over 1900 customers worldwide and that was up 48% year-on-year.”

SAP is frequently showcasing the growth of Employee Central. But this is only one component in SuccessFactors. SAP and Bill McDermott, in particular, like to continually trump up SuccessFactors, but SuccessFactors always seems to be in transition. It is really only strong in a few areas of HR. For example, the payroll functionality in SAP’s ECC system is one of the few goods things SAP’s old HRM solution. However, SuccessFactors has nothing close to as good, which is one reason why many of their customers have been so reticent to move to SuccessFactors.

SuccessFactors also continues to have integration issues going back to ECC. This really should have been taken care of at this point as the SuccessFactors acquisition five and a half years ago.

The use of the 48% number was used by Bill McDermott because it is more impressive than growth in any other area of the SuccessFactor suite. This is standard of all the comments made by all of the SAP executives in this session. The only part of the story and the most pleasant part ends up being verbalized.

The Ariba Network

“SAP Ariba now has over 2.8 million companies in a 180 countries, trading nearly 1 trillion U.S. dollars in goods and services annually on the Ariba network.”

That might be good, but SAP has not been able to leverage Ariba very well. Very few SAP customers actually connect Ariba to their SAP ERP systems.

Time to be Intensely Clear?

“Let me be intensely clear, the Internet of Everything requires hyper connectivity on a global basis. SAPs business networks lead the industry, connecting not only our customers, but also our competitor’s customers. It is the world’s network.”

Interestingly, this term “being clear,” “crystal clear” or in this case being ‘”intensely clear” seems to be a marker for a person who is about to tell a lie. It is curious that this same language appeared with Trump’s Lawyer, Jay Sekulow in recent weeks.

Trump is under investigation. Everything stated after “I want to be clear” was a lie.

And similarly, Bill McDermott states he wishes to be “intensely clear” that….IoT requires hyperconnectivity on a global basis.

That may be true, but the following statement about SAP business networks leading the industry is incorrect, but at the same time is nonsensical. What business network is Bill McDermott talking about. SAP owns a procurement application in Ariba – that has a marketplace, but this has nothing to do with IoT. SAP gets a very tiny amount of its revenue from IoT. So if this control over “business networks” is a strategic advantage for SAP in IoT, it is not showing up in the sales numbers.

Fast Cloud Growth for SAP?

“We believe SAP is the only company in the business software industry at scale to deliver both fast growth in the cloud and core license growth.

This is because SAP takes a much more customer centric approach to the transition in the cloud, protecting legacy investments, while offering the most complete vision for the cloud. The breadth and depth of SAPs end to end portfolio is the clear differentiator.”

The problem with this being that SAP is not delivering fast growth to either the cloud or to the “core” which would seem to mean core license growth.

SAP Cloud Platform Incubating Innovation?

“SAP’s innovation agenda ensures a clear path to future growth. Without API Hub and open SAP Cloud Platform our ecosystem is actively incubating new innovations. We’re excited that new partnerships will proliferate the SAP platform across the hyperscale public cloud providers.”

No, the SAP Cloud Platform isn’t incubating much of anything, because barely anyone uses it. On SAP projects, it is difficult to even get a glimpse of anyone using the SAP Cloud Platform.

Bill McDermott’s Digital Revolution and Leonardo

“At the Epicenter of the digital revolution is SAP Leonardo. Why? Because Leonardo integrates breakthrough technologies such as AI, Machine Learning, Big Data, Analytics, IoT and Blockchain.”

What particular digital revolution is Bill McDermott talking about? The move from downloading music to using services like Spotify? Bill could benefit from being a little more specific. Leonardo is a very recently introduced solution that is SAP’s renaming of its IoT solution. But it does not yet have real customers doing anything and it’s not an application as much as a toolkit you can build things with. It greatly lags other complete IoT solutions. This is covered in the article

“Customer interest in SAP Leonardo is really high. As you know there was well over 20,000 Sapphire attendees this year from 4600 companies and they all experienced in some form the potential of Leonardo. Nearly 1000 customers in 48 countries attended our local SAP Leonardo event in Frankfurt earlier this month.”

It may be, but that does not address the fact that Bill McDermott does not want to talk about that there is not very much to Leonardo and it does not have customers live on it. SAP has customers live on some customer solutions at various accounts, but Leonardo is yet another pre-released product that SAP is pretending is ready to use.

Everything About SAP is Best in Class?

“In conclusion, everything about SAPs business is best in class. It’s integrated and focused and it’s delivering on the shareholder value promise. We’re building great products, telling a great story, delivering a great service and most importantly building a great team.”

Does Bill McDermott listen to himself when he speaks?

SAP’s Exaggerated Pipeline

“We also are just getting started with more than 80% of our ERP customer base still in S/4HANA pipeline. The upside is amazing. Our company has never been stronger, more engaged and more inclusive. In fact, we have reached our goal of having more than 25% women in management positions across SAP.

  • SAP has a lot more than 80% of the customer base in the pipeline (taking Bill’s assumptions that they all convert to S/4HANA, which is not actually true), because the vast majority of S/4HANA customers don’t have S/4HANA operational. Many S/4HANA customers are not customers in the traditional sense because they received the software for free. Some customers purchased S/4HANA to setting an indirect access claim on the part of SAP. Therefore, they don’t really willingly own it.
  • What Bill McDermott is doing here is switching a negative into a positive. SAP has had very poor adoption of S/4HANA by customers. The primary reason for this is that S/4HANA close to impossible to implement. This is covered in the article How the Overall S/4HANA Suite is Not Yet Released.

So therefore I’d like to acknowledge, recognize and thank the 87,000 women and men of SAP worldwide for their immense dedication to our customers and our shareholders. For SAP, the best is yet to come, a sustainable growth company for the ages.”Bill McDermott

This line was stolen from Frank Sinatra. It is a song actually. And the idea that SAP is a sustainable growth company for the ages is really out there. Especially since outside of acquisitions, SAP has not been growing enough to be considered a growth company anymore.

Rapid Cloud Growth for SAP?

“Firstly, our committed future cloud revenue or new cloud bookings has grown by 33% and our cloud revenue growth came in at 29%, marking the 17th consecutive quarter of consistent rapid growth in the cloud.”

SAP’s growth in the cloud may have been consistent, but it has not been rapid. If it had been SAP would not have to cloud wash so hard. It would not have had to acquire cloud vendors to make the impression on Wall Street that they are more cloud-based than they are.

“Let me first be very clear, from a profitability standpoint we have been all the way through the year very clear on what our priorities are for this year and how this will impact the overall gross margin. We continue with conscious investment decisions in 2017 and we will still see mix shift effects.”

Here we go with the “be clear” preamble. And then, that SAP is “very clear” about priorities.

Cloud Investments are Causing Declining Margins?

“Remember, the majority of our investments are in our public cloud business. Our decision to invest in a new data center in the Middle East is yet another perfect example of how we are getting ready for future growth. But this, of course, put additional pressure on the public cloud margin which was 57.6% in Q2, if you back out our highly profitable business networks business.”

The problem with this is that SAP has actually invested very little into data centers. This was covered in the book SAP Nation by Vinnie Mirchandani. Secondly, why have few of these investments paid off? SAP has had a long time to get their cloud infrastructure going and they chose to invest elsewhere. At one time SAP said that they were going to go head to head with AWS. What happened to that idea?

The issue is that SAP’s margins are declining, but they are not primarily because of SAP’s investments into its cloud business, although the cloud acquisitions are related to the decline. Here is how. As SAP increasingly diversifies away from its core offering, the profit margins are lower. This is what SAP does not want Wall Street to figure out. SAP is facing a long-term decline in its profitability. This is the same long term decline that has already been experienced by, for example Micrsosoft. Microsoft still has high revenues, but the profitability outside of Windows and Office are far lower than its profitability among its first products. Microsoft, as it has diversified from its first products, has become less efficient in profit generation. And guess where the growth is coming from? (hint, not the core products).

This is covered in the book The Software Paradox.

“As we strive for running each and every business more effectively and efficiently, we continue to see improvement in the margin of our private cloud infrastructure as a service business, as well as in our business networks. Since however public cloud and private cloud are continuously increasing their share within cloud revenue, this revenue mix shift effects negatively impacted the cloud margin by approximately 2 percentage points.”

And the faulty explanation continues.

“As for our services gross margin continue – continued its very nice upward trend as expected and was 23.5% for the quarter, which is the 5.6 percentage point year-over-year increase. This was driven by the completion of previous investment projects and a strong top line increase.”

SAP gets roughly 2% of its revenues from consulting services. So why would that matter?

“So what should you all take away from this quarter? To put it in short terms, SAP is the best positioned company to shape the digital enterprise. Our cloud growth is fuelled by the breadth and completeness of our cloud offerings. All our products are linked to our S/4HANA digital core, providing a real end to end offering to our customers.”

What company is today not a digital enterprise? Companies in Somalia? The correct term is “enterprise software.”

All Cloud Offerings are Connected to S/4HANA?

SAP does not have completeness to its cloud offerings. All of the products are not only not connected to S/4HANA, they lag in their connectivity. This is really a straight up lie by Luca, who as a finance person would not have any idea if it is true as she would have never worked with SAP’s technology.

SAP to Become Carbon Neutral?

“In line with our goal to become carbon neutral by 2025, we reduced our second quarter CO2 emissions by over 40% compared to the prior year.” – Luca Mucic

How is SAP going to become carbon neutral by 2025? Are all SAP buildings going to be powered by rooftop solar, and will all plane and car transport be powered by small nuclear generators? It is interesting that even on the ancillary statements, SAP never stops with the inaccuracies.

Bill McDermott Wants Analyst to Not Give It a Moment’s Thought?

“Yeah. Hi. Thanks very much for taking my questions. I’ve got one question on the clouds and then just a clarification. If I look at the cloud revenue growth sequentially it looks like it slowed down marginally in the second quarter. I guess it’s quite a small change and momentum, but it does come at a time of management change. So I guess the questions off, firstly, are you confident that you can sustain the 30% growth rate as that business scales?

And secondly, are you confident that with the departure of Steve Singh, the management position of the cloud is still robust. And thirdly, can you just give us some metrics around the bookings duration. Obviously, that the year-on-year growth is strong, but can you talk about duration. – Charles Brennan

Thank you so much for the question, Charles. I’ll start it off and then hand it over to Luka. So first and foremost on the cloud, the bookings and the revenue don’t even spend a moment on it. Basically when you book the software, obviously you’re booking the contract and that will go into revenue to be recognized.

The revenue that’s actually recognized has something to do with timing and timing in the quarter for sales and so on. And some of these sales happen to have been a little bit more back ended than usual. The pipeline for the cloud is fantastic. The 30 plus percent cloud growth and the pipeline to support that is ever intact. The business looks really, really strong.”

Right. So according to Bill, anything that looks different than what SAP is presenting “don’t even spend a moment on it.”

And then Bill wants to convince the listeners that the sales are more backend than usual. But why would that be? What was different about this quarter than Q1? Then Bill goes on to praise the pipeline. Well, the pipeline cannot be validated by the analyst. So Bill is changing the topic from something the analyst can verify, to something where the analyst needs to trust Bill McDermott.

Are SAP Executives Friends for Life?

“And just to show you the class of SAP. I next week along with the executive board will be flying out to Seattle to have a going away party for our great friend Steve Singh. So this hotel when you check into SAP you don’t check out, like we’re friends for life. And that’s the kind of company we are.” – Bill McDermott

Well this is nice. Bill did an interesting thing here. He pivoted way from the question. The question was not whether Bill and Steve would be friends for life. That seems like a personal matter. The question was how was SAP going to deal with the loss of a strategic executive.

On top of this, he then goes back to priasing SAP for being very classy. So this is a non-answer.

“A question for Bill and maybe you know, Luka if you could touch on this too. I mean, obviously we’ve seen the S/4HANA customer account number go up 70% this year, but and I’m assuming that’s a big part of what’s driving that that license growth.”

This is a bit of accuracy. Let me be “crystal clear,” S/4HANA is doing very poorly and has few live customers.

“How do you think, where are we, I guess, what’s hitting our win with S/4HANA, because the customer count might be high. But you know, our checks still say that penetration still has the way to go even within side those. So how do you think about where we are in the cycle and I guess the sustainability of some of these you know, the six consecutive quarters of growth on license?” – Philipp Winslow

And that is true. The S/4HANA sales numbers are highly exaggerated versus those companies actually using the application or implementing the application. Many companies that started implementing S/4HANA stopped after what they learned about S/4HANA.

Early Days for a Product that is 2.5 to 3 Years Old?

“Thank you very much, Phil, first of all for your kind remarks. We are in the really early days of the S/4HANA momentum. First of all, if you apply the 80:20 logic, you know, you’d be a lot closer to 15 or 20 then you would be to 80% in terms of the penetration and all the opportunities that are out there.

And you know that’s the traditional base we’re talking about. We’re making a bold move into customers that haven’t seen SAP and may not even be thinking of SAP in the mid-market, in the upper mid-market.”

But it isn’t early days for S/4HANA.

  • SAP released Simple Finance in June of 2014.
  • SAP released the rest of the suite (S/4HANA overall or EM) in Feb of 2015.

That is now between 2.5 and 3 years ago. How is July 2017 still “early days?”

Here are some of the statements from that announcement.

“When Hasso Plattner invented SAP HANA, we knew the day would come for SAP Business Suite to be reinvented for the digital age. At a moment when businesses around the world need to enter new markets and engage with their consumers in any channel, there’s now an innovation platform designed to drive their growth. This is an historic day and we believe it marks the beginning of the end for the 20th century IT stack and all the complexity that came with it.”

Hasso did not invent HANA. That is a myth distributed by Hasso Plattner and by SAP. For details see the article Did Hasso Planner and his Ph.D. Students Invent HANA? That is or course not relevant for an earnings call, but it highlights the difficulty SAP in telling the truth on even ancillary topics. Even how invented something is altered by SAP. Of course, Bill McDermott will suck up to Hasso Plattner. He works for Hasso Plattner. Therefore, Bill helps sustain the myth of Hasso inventing HANA.

Furthermore, it seems like something that is so great that it should have had no problem in adoption. Right? Well according to even the SAP biased ASUG in their S/4HANA survey of 2016, S/4HANA had 350 live customers. 350. This is covered in the article How to Best Understand ASUG’s S/4HANA Survey.

“So as we assert our will in different marketplaces in different industries, I would call this the earliest possible days of S/4HANA in terms of the rotation and the real catalyst for continued growth in the company.” – Bill McDermott

Yes, in McDermott-speak 2.5 to 3 years is the earliest possible days. If we create a time chart for McDermott-speak, it would look something like the following:

  1. Earliest Possible Days: Up to 3 Years After Launch
  2. Early Days: 4 Years After Launch
  3. Adoption Begins in Ernest: 5.5 years After Launch

“Yeah. It’s hard to add anything to that. I think adoption always in our industry is kind of an S-shape and we are clearly basically still in the early adopter phase. As you pointed out some of the early adopters have a long way to go to really roll it out across the entire end state. And now we see the first emergences of fast followers kicking in. So we have lots of room to grow.” – Luca Mucic

Luca has the same strange time concept that Bill McDermott, where an application begins wider adoption somewhere around the 5.5 year mark?

“And more importantly even S/4HANA is invigorating growth in other elements of our portfolio as well. CUC was very strong I highlighted this. Analytics was strong in the quarter that goes along nicely with the digital board room concept that S/4HANA really brings to life. So we will be having a lot of fun with this baby which is just barely becoming a toddler by now.” – Luka Mucic

From the beginning of this statement until the end this is false. However, apparently, Luka thinks about babies pretty often. And in a few years from now, when S/4HANA sees adoption (according to Bill and Luka) it will really be something!

Run Simple Ahead of its Time?

“And Phil you know, one CEO said something interesting to me yesterday, he said run simple was actually ahead of its time and I think he said right, because the most intractable challenge of our era is complexity, and when you think about the idea of a digital boardroom simplifying the management process for executives around the world and you think about taking cost out and improving productivity with HANA and S/4HANA and aligning all the management team with the line of business cloud and the network, you’re talking about just a story that doesn’t end because there’s so much room for all these companies to radically simplifying grow if they can apply the right digital technology. So it’s really early days and it’s an exciting era for us Phil.” – Bill McDermott

Run Simple was a marketing construct that was dropped as was covered in the article Is SAP’s Run Simple Real?

Run Simple has been dropped as a marketing construct not because it was “ahead of its time” but because it was completely false. SAP makes the most complex software with the highest maintenance costs in the categories that SAP competes in, which can be seen at Brightwork’s online TCO Calculators.

As a long-term SAP consultant myself, I found it the height of deception to have a “Run Simple” marketing campaign. The idea behind Run Simple was a simple counter-marketing to message the opposite of SAP’s well-earned reputation for being complicated and expensive. Furthermore, HANA and S/4HANA, in particular, are even more complex than what customers were exposed to by using Oracle of DB2 as the database and ECC as the ERP system. SAP has drastically increased complexity on SAP projects by introducing HANA and S/4HANA while pretending that these two items allowed companies to “Run Simple.”

S/4HANA to Beat Up NetSuite?

“And then secondly, perhaps for kind of Bill, you know, it’s now been a couple of quarters that the NetSuite deal has been closed. What do you see from a competitive perspective form that kind of combination and perhaps also give us an update on Workday? Thanks. – Gerardus Vos

And Gerardus, I’ll offer you an answer to your question on NetSuite. You know, Oracle strategy seems to be – to stay relatively large enterprise with Fusion, but to have a two tier strategy with ERP and take NetSuite down market and that’s understandable, the platform has been around for 20 years. So it will probably do better in the low end markets. We see them. We compete with them. S/4HANA is just going to be a runaway story in that place, up or mid-market, even lower mid-market.”

So far has this turned out to be true? Not from Brightwork’s research into S/4HANA.

Workday is Good, But Only for Parochial Buyers?

“Workday obviously, Workday can hold their own. If you’re – especially if you’re in the United States and you’re dealing directly with the Human Capital Management Executive. It gets a little bit more interesting for us when it’s a more comprehensive decisions for companies than just HR Director.

For example, they don’t really have a platform. So the SAP Cloud platform and the extensibility of that. If you think about S/4HANA and the nucleus of the 21st Century Enterprise and all line of business executives evolving their use of their individual line of business with the center of gravity, the data and the process of the company. You know, that’s game set match for SAP.

And when you talk Total Workforce Management, we’re the only one with the network around contingent labor and therefore Total Workforce Management and that’s why Gartner and others say, if you have more than 5000 employees it’s all about SAP, because what you see with Workday against SAP is a good fight with the LOB HR director in the United States.”Bill McDermott

So this is how Bill is trying to distract from the fact that Workday is having good success versus SAP. Workday customers tend to be far happier than SAP customers. It is true that the larger the company and the larger the decision-making apparatus the more SAP will tend to win against Workday. Workday is limited to HR and finance.

Workday customers tend to be far happier than SAP customers. But according to Bill, they should not be happy because they don’t have a platform? The SAP Cloud Platform which was the renamed HANA Cloud Platform and which is covered in the article Was the HANA Cloud Platform Designed for HANA Washing, has very few customers using it. Therefore, in terms of use SAP does not have a “platform” either. In fact, the entire term platform is meaningless the way Bill is using it. It is simply a way to take an unsubstantiated shot at Workday which is pulling business from SAP.

Also, is it true that the larger the company and the larger the decision-making apparatus the more SAP will tend to win against Workday? Workday is limited to HR and finance.

This is simply an executive attempting to cover up a weakness. Secondly, SAP has ridden SuccessFactors for years now. However, the acquisition is old at this point. SAP’s acquisitions normally decline in competitiveness the longer they are held by SAP.

S/4HANA Has 850 Live Customers on S/4HANA?

“Yes, sure. I think Bernstein [ph] as well. But we have over 850 live customers now to just over two and a half thousand projects ongoing, so it continues to be very successful. And as Bill said these customers are also investing in the top product. So this is really a tremendous success story for a city and the more they go live, the more expansion we will see.” – Rob Enslin

Nope. S/4HANA has far fewer live customers than this. The biggest story about S/4HANA is how low the uptake has been and how immature and problematic S/4HANA continues to be. SAP has been continuously misrepresenting the uptake of S/4HANA as is covered in the article How SAP Controls Perceptions with Customer Numbers.

If SAP has 2500 S/4HANA customers in ongoing implementations, it would be unmissable. But the S/4HANA job market is actually very small.

S/4HANA as a 21st Century Digital Platform?

“This is Bill, Ross. You should think about S/4HANA as a growth story. We shouldn’t spend all of our time on how much of that growth story and what percentage of that will be recognized one way or the other. I think what you should think about it is the 21st century digital platform for a successful company, is the best run SAP and S/4HANA is central to that.”

Bill’s similarities to a politician become more and more observable the more one listens to him. And like a politician, he continually diverts his audience away from details, up to higher level of abstraction, where Bill feels more comfortable. Bill actually detests details, and that shows in his constant redirections of questions. And the finishing piece is the description of S/4HANA as a “21st century digital platform.”

The Bill McDermott Timeline of Retroactive Expectations Lowering

“Do I believe that the theme is there for continued growth on a positive basis even on the upfront license recognition for S/4HANA? Absolutely. And do I think that the cloud and the full rental model for S/4HANA in the high end, as well as upper mid-market in mid has only scratched the surface so far? Absolutely. That’s why I say it’s such an early moment in the evolution of this growth story, you should just feel really great about it.” – Bill McDermott

Once again, Bill is trotting out the “Bill McDermott Timeline.” This is where things that he predicts that do not come true, have not come true only becuase a sufficient amount of time has not passed.

“And we are very confident that while we talked today a lot about HANA, we talked a lot about S/4HANA, when we talk again in one or two years, Leonardo will be equally important to our financial success than what we talked today about S/4 and HANA. So this should give you some inspiration what’s possible.” – Bernd Leukert

This is the most important quotation in this call. This indicates that SAP is about to switch horses to Leonardo. If SAP keeps analysts focused on S/4HANA, they will catch on that SAP has been misleading them the entire time. Therefore, SAP needs to change topics. Now Leonardo will be the rallying cry, while SAP hopes that they can distract analysts with the “great Leonardo story” so they do not ask any questions about S/4HANA.

Bill McDermott’s SAP Synopsis for Simpletons

“And if I was just to summarize it for you in five simple points, HANA, S/4HANA, the line of business cloud, the business network and Leonardo and IN five fingers you can tell the entire SAP story and what’s so compelling about the SAP story is in all areas we have the greatest breadth, depth and reach into industries and global markets of any competitor in this space.”Bill McDermott

And the master of oversimplification explains SAP in a uniquely false way that one would use on preschoolers, and misdirection drops the mike.

“This is our product that we resell, has nothing to do with databases. Clearly S/4HANA and HANA, therefore, is the absolute standard. That’s the main contributing factor what support profitability has actually continued to climb up and continues to be a positive contribution.”Luka Mucic

Luka knows nothing about SAP’s products and proves it with every new statement she makes.


SAP’s mislead the analysts on this call multiple dimensions. Each of the people speaking from SAP obviously has many millions of dollars in stock options, so this model where you obtain information from people that have a clear financial bias to mislead you so that they can exercise their options at the maximum price makes little sense.

It is reminiscent of the newspapers I used to read when I was in Pakistan. The information is interesting, but only from the perspective of analyzing what the powers that be would like people to believe. It has no inherent validity.

Clearly, when SAP anticipates that it will be speaking to people who can’t directly validate their statements, the lying is in a different dimension.